20+ Morningstar Interview Questions and Answers for Freshers

Issued shares are the total number of shares a company has authorized and distributed, while outstanding shares are the shares held by shareholders.

• Issued shares refer to the total number of shares a company has authorized and distributed to shareholders.

• Outstanding shares are the shares held by shareholders, excluding treasury shares and shares held by insiders.

• Issued shares can include both outstanding shares and treasury shares.

• Outstanding shares are important for calculat...read more

The 3 financial statements are interrelated and provide different perspectives of a company's financial performance.

• The income statement shows the company's revenues, expenses, and net income for a specific period.

• The balance sheet shows the company's assets, liabilities, and equity at a specific point in time.

• The cash flow statement shows the company's cash inflows and outflows for a specific period.

• The net income from the income statement is used to calculate the retained e...read more

Open market operations refer to the buying and selling of government securities in the open market by a central bank.

• Central banks use open market operations to control the money supply and interest rates in the economy.

• When a central bank buys government securities, it injects money into the banking system, leading to lower interest rates and increased lending.

• Conversely, when a central bank sells government securities, it withdraws money from the banking system, leading to ...read more

EPS stands for Earnings Per Share, a financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock.

• EPS is calculated by dividing the company's net income by the number of outstanding shares.

• It is an important indicator of a company's profitability and is often used by investors to evaluate a company's performance.

• Higher EPS indicates higher profitability and potential for growth.

• EPS can be diluted or basic, depending on ...read more

Derivatives are financial instruments whose value is derived from an underlying asset or benchmark.

• Derivatives can be used for hedging, speculation, or arbitrage.

• Common types of derivatives include options, futures, forwards, and swaps.

• Derivatives allow investors to gain exposure to various asset classes without owning the underlying assets.

• For example, a stock option is a derivative that gives the holder the right to buy or sell a specific stock at a predetermined price.

• Deri...read more

A spin-off is a new company formed through the sale or distribution of new shares of an existing business division or subsidiary.

• Spin-offs are created when a parent company decides to separate a portion of its business into a new entity.

• Spin-offs can help unlock value for shareholders by allowing the new entity to focus on its specific market or industry.

• Examples of spin-offs include PayPal from eBay, Trivago from Expedia, and AbbVie from Abbott Laboratories.

Various company sources are used to give ESG risk ratings.

• Company reports and disclosures

• Third-party data providers

• News articles and media coverage

• Industry benchmarks and standards

• Stakeholder engagement and surveys

Sustainable finance refers to financial activities that promote sustainable economic growth while minimizing negative environmental and social impacts.

• Sustainable finance involves investing in companies that prioritize environmental and social responsibility.

• It also includes financing projects that promote sustainability, such as renewable energy and green infrastructure.

• Sustainable finance aims to balance economic growth with social and environmental responsibility.

• Examples ...read more

Payables turnover ratio is a financial metric that measures how quickly a company pays off its suppliers.

• It is calculated by dividing the cost of goods sold by the average accounts payable balance.

• A high ratio indicates that a company is paying off its suppliers quickly, while a low ratio suggests that it is taking longer to pay its bills.

• The ratio can be used to assess a company's liquidity and its ability to manage its cash flow.

• For example, if a company has a cost of goods...read more

Bank reconciliation statement is a document that compares the bank statement with the company's accounting records.

• It helps to identify any discrepancies between the two records.

• It includes details of deposits, withdrawals, and bank charges.

• It ensures the accuracy of the company's financial records.

• It is usually prepared monthly.

• Example: If the bank statement shows a withdrawal of $100 but the company's records show a withdrawal of $80, the bank reconciliation statement will ...read more

A promissory note is a written promise to pay a specific amount of money at a certain time.

• It is a legal document that outlines the terms of a loan or debt.

• It includes the amount borrowed, interest rate, repayment schedule, and consequences of default.

• Examples include personal loans, student loans, and business loans.

• Promissory notes can be bought and sold as a form of investment.

• They are enforceable by law and can be used as evidence in court.

ESG stands for Environmental, Social, and Governance. It is a framework used to evaluate a company's sustainability and ethical practices.

• Environmental factors include a company's impact on climate change, natural resources, and pollution.

• Social factors include a company's impact on its employees, customers, and communities.

• Governance factors include a company's leadership, transparency, and accountability.

• Investors use ESG criteria to make investment decisions that align wit...read more

A promissory note is a legal document that contains a promise to pay a specific amount of money to a person or entity.

• It is a written promise to pay a debt

• It includes the names of the parties involved

• It specifies the amount of money to be paid

• It outlines the terms of repayment, including interest rates and due dates

• It can be secured or unsecured

• It can be negotiable or non-negotiable

Primary is used to define a primary bean when multiple beans of the same type are present, while Qualifier is used to specify which bean to autowire when multiple beans of the same type are present.

• Primary annotation is used to give a higher preference to a bean when multiple beans of the same type are present in the Spring application context.

• Qualifier annotation is used to specify which bean to autowire when multiple beans of the same type are present. It helps in resolving...read more

Fault tolerance in Microservices can be achieved through redundancy, graceful degradation, and circuit breakers.

• Implementing redundancy by having multiple instances of each microservice running to handle failures.

• Using graceful degradation to ensure that the system can still function even if certain microservices are unavailable.

• Utilizing circuit breakers to prevent cascading failures by temporarily stopping requests to a failing microservice.

Implementing Spring Security involves configuring security settings in the Spring application.

• Add Spring Security dependency in pom.xml

• Configure security settings in SecurityConfig class

• Define user roles and permissions

• Use annotations like @EnableWebSecurity and @Secured

Executors are a class that provides factory and utility methods for Executor, ExecutorService is an interface that represents an asynchronous execution service.

• Executors class provides factory and utility methods for Executor interface

• ExecutorService is an interface that represents an asynchronous execution service

• ExecutorService extends Executor interface

• ExecutorService provides methods to manage termination and produce Future objects for tracking progress of one or more asy...read more

OAuth 2 is an authorization framework that allows a third-party application to obtain limited access to an HTTP service.

• OAuth 2 is used for delegated access, allowing a user to grant a third-party application access to their resources without sharing their credentials.

• It involves the use of access tokens, which are issued by the authorization server after the user authenticates and authorizes the application.

• OAuth 2 supports different grant types such as authorization code, i...read more

Java uses automatic memory management through garbage collection to allocate and deallocate memory.

• Java uses garbage collection to automatically manage memory by deallocating objects that are no longer needed.

• The JVM has a heap where objects are allocated and garbage collection is performed to reclaim memory.

• Java provides the 'finalize()' method for objects to perform cleanup before they are garbage collected.

• Memory leaks can occur in Java if objects are not properly derefere...read more

Different types of garbage collection algorithms in software development.

• Mark and Sweep: Identifies and removes unreachable objects.

• Generational: Divides objects into different generations based on age.

• Parallel: Uses multiple threads to perform garbage collection concurrently.

• Incremental: Spreads garbage collection work over multiple cycles to reduce pause times.

I'm sorry, I don't understand the question. Could you please rephrase it?

• Please clarify the question

• I'm not sure what you mean by 'locked sight'

• Could you provide more context or information?