Northern Trust Analyst Interview Questions, Process, and Tips

Q1. What is investment banking
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Investment banking involves providing financial services to corporations, governments, and other institutions.
• Helping companies raise capital through issuing stocks and bonds

• Advising on mergers and acquisitions

• Providing strategic financial advice to clients

• Assisting with IPOs (Initial Public Offerings)

• Trading securities for clients
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Q2. Different between preference share and equity share capital? What is preferance share capital
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Preference shares have fixed dividend rates and priority over equity shares in terms of dividends and assets during liquidation.
• Preference shares have a fixed dividend rate, while equity shares do not guarantee dividends.

• Preference shareholders have priority over equity shareholders in terms of receiving dividends and assets during liquidation.

• Preference shares are less risky compared to equity shares.

• Preference shares...read more
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Q3. Different between trial balance and balancesheet
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Trial balance is a list of all general ledger accounts with their balances, while balance sheet is a financial statement showing assets, liabilities, and equity at a specific point in time.
• Trial balance is an internal document used to ensure the total debits equal total credits before preparing financial statements.

• Balance sheet is a financial statement that shows a company's financial position at a specific point in t...read more
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Q4. What is derivatives and it'it's types
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Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.
• Types of derivatives include futures, options, swaps, and forwards.

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

• Examples of derivatives include stock options, commodity futures, and interest rate swaps.
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Q5. Different between future and forward derivatives
Ans. 
Future and forward derivatives are similar in nature but differ in terms of standardization, trading location, and counterparty risk.
• Futures contracts are standardized and traded on exchanges, while forward contracts are customized and traded over-the-counter.

• Futures contracts have daily settlement and margin requirements, while forward contracts settle at maturity.

• Futures contracts have lower counterparty risk due to ...read more
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Q6. What is hedge fund
Ans. 
A hedge fund is an investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets.
• Hedge funds are typically only available to accredited investors due to their complex and risky nature.

• They often use leverage and derivatives to amplify returns.

• Hedge funds charge both a management fee and a performance fee based on the fund's profits.

• Examples of hedge funds i...read more
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Q7. Example of cash and cash equivalent, and where to record
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Cash and cash equivalents are highly liquid assets that can be easily converted into cash, such as bank accounts and short-term investments.
• Cash in hand

• Bank accounts

• Short-term investments like money market funds

• Petty cash

• Where to record: Typically recorded under current assets on the balance sheet
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Q8. What is Dividend? And where should we record in the trail balance?
Ans. 
Dividend is a distribution of a portion of a company's earnings to its shareholders, typically in the form of cash or additional shares.
• Dividends are recorded in the income statement as a deduction from the company's net income.

• They are also recorded in the statement of changes in equity.

• In the trial balance, dividends are typically recorded as a reduction in the retained earnings account.

• Dividends can be paid out in t...read more
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Q9. Who receives the dividend?
Ans. 
The dividend is typically received by the shareholders of a company.
• Dividends are payments made by a company to its shareholders as a distribution of profits.

• Shareholders receive dividends in proportion to the number of shares they own.

• Dividends can be paid in the form of cash, stock, or property.

• Dividend payments are usually declared by the company's board of directors.
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Q10. What is capital, and where do we record it?
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Capital refers to the financial assets or resources owned by a company, and it is recorded in the balance sheet under the equity section.
• Capital represents the funds contributed by the owners or shareholders of a company.

• It can include common stock, preferred stock, retained earnings, and additional paid-in capital.

• Capital is recorded in the balance sheet under the equity section, which shows the company's total assets...read more
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Q1. What is derivatives
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Q2. What do you kow about capital markets
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Online aptitude tests

Q1. Golden rules of accounting
Ans. 
The golden rules of accounting are basic principles that guide the process of recording financial transactions.
• The golden rule of accounting is that for every debit entry, there must be an equal credit entry.

• There are three types of accounts: real, personal, and nominal. The golden rules differ for each type of account.

• For real accounts, the golden rule is: Debit what comes in, Credit what goes out. For example, when c...read more
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Q2. What is Derivatives
Ans. 
Derivatives in finance are financial instruments whose value is derived from the value of an underlying asset or index.
• Derivatives can be used for hedging against risk, speculating on price movements, or gaining exposure to assets without owning them.

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

• Options give the holder the right, but not the obligation, to buy or sell an asset at a specified...read more
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Q1. Golden rules of accounting
Ans. 
The golden rules of accounting are basic principles that guide the process of recording financial transactions.
• The golden rules include the principles of debit and credit, which are used to record transactions accurately.

• Debit what comes in, credit what goes out - this means that assets increase with debits and decrease with credits.

• Debit expenses and losses, credit income and gains - this ensures that expenses and los...read more
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Q2. What is Derivatives
Ans. 
Derivatives in finance are financial instruments whose value is derived from the value of an underlying asset, index, or rate.
• Derivatives can be used for hedging against risk, speculating on price movements, or gaining exposure to assets without owning them.

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

• Options give the holder the right, but not the obligation, to buy or sell an asset at a sp...read more
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Q3. What is BRS
Ans. 
BRS stands for Bank Reconciliation Statement, which is a document that compares the bank's records with the company's records of its checking account balance.
• BRS helps in identifying discrepancies between the two sets of records

• It ensures that the company's financial statements are accurate and complete

• Examples of items on a BRS include outstanding checks, deposits in transit, bank errors, and service charges
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Q4. What is Bond
Ans. 
A bond is a debt investment where an investor loans money to an entity (corporate or governmental) for a defined period at a fixed interest rate.
• Bonds are issued by governments, municipalities, corporations, and other entities to raise capital.

• Investors purchase bonds as a form of fixed-income investment.

• Bonds have a maturity date when the principal amount must be repaid to the bondholder.

• Interest payments are made per...read more
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Q5. What is Investment Banking
Ans. 
Investment banking involves providing financial services to corporations, governments, and other institutions.
• Helping companies raise capital through issuing stocks and bonds

• Advising on mergers and acquisitions

• Providing strategic financial advice to clients

• Assisting with initial public offerings (IPOs)

• Executing trades and managing risk for clients
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Q6. About Northern Trust
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Q1. Basics on resume
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Q2. Basic on resume
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Q1. Ask about why northern trust
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Q2. Bad experience all about apart from resume and also not asked technical question
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