Morningstar Senior Research Associate Interview Questions and Answers

Finance is the management of money and investments.

• Finance involves managing money, investments, and financial risks.

• It includes activities such as budgeting, investing, and financial analysis.

• Examples of finance include personal finance, corporate finance, and public finance.

Fixed income securities provide a fixed return while variable income securities provide a return that fluctuates based on market conditions.

• Fixed income securities provide a fixed rate of return, such as bonds or CDs

• Variable income securities provide a return that fluctuates based on market conditions, such as stocks or mutual funds

• Fixed income securities are generally considered less risky than variable income securit...read more

Bonds are financial instruments that represent a loan made by an investor to a borrower, typically a government or corporation.

• Bonds are debt securities that pay interest over a fixed period of time.

• They are used by governments and corporations to raise capital.

• Investors who purchase bonds are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at mat...read more

Different types of bonds include government bonds, corporate bonds, municipal bonds, and convertible bonds.

• Government bonds are issued by national governments to finance their activities and are considered low-risk investments.

• Corporate bonds are issued by corporations to raise capital and typically offer higher yields than government bonds.

• Municipal bonds are issued by local governments to fund public projects and are...read more

NIM is the difference between interest income and interest expense on a bank's balance sheet. NII is the income generated by a bank's interest-earning assets.

• NIM is a measure of a bank's net interest income as a percentage of its interest-earning assets.

• NII is the difference between interest income and interest expense on a bank's income statement.

• NIM is affected by changes in interest rates and the composition of a ba...read more

The banking sector earns income through various sources such as interest on loans, fees and commissions, and investments.

• Interest on loans is a major source of income for banks

• Fees and commissions charged for services such as account maintenance, ATM usage, and wire transfers also contribute to income

• Investments in stocks, bonds, and other financial instruments generate income for banks

• Foreign exchange transactions and...read more