10+ Eaton Corporation Interview Questions and Answers

Derivatives are financial contracts that derive their value from an underlying asset or benchmark.

• Types of derivatives include options, futures, forwards, and swaps.

• Swaps can be interest rate swaps, credit default swaps, total return swaps, or currency swaps.

• IRS stands for interest rate swap, CDS stands for credit default swap, TRS stands for total return swap, and CYS stands for currency swap.

• Fixed income securities are debt securities that pay a fixed interest or dividend u...read more

Hedge funds are private investment funds that use aggressive strategies to generate high returns. Mutual funds are professionally managed investment portfolios that pool money from many investors.

• Hedge funds are typically only available to accredited investors and have fewer regulations than mutual funds.

• Hedge funds often use leverage and derivatives to amplify returns, but also increase risk.

• Mutual funds are more accessible to retail investors and offer a diversified portfol...read more

Derivatives are financial contracts that derive their value from an underlying asset or security.

• Types of derivatives include futures, options, swaps, and forwards.

• Futures are contracts to buy or sell an asset at a future date at a predetermined price.

• Options give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price.

• Swaps involve exchanging cash flows based on different financial instruments.

• Forwards are similar to futures, but are cu...read more

Different types of financial statements include income statement, balance sheet, cash flow statement, and statement of changes in equity.

• Income statement: Shows a company's revenues and expenses over a specific period of time.

• Balance sheet: Provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity.

• Cash flow statement: Details the cash inflows and outflows of a company during a specific period.

• Statement of change...read more

Fund Accounting is a specialized accounting system used by non-profit organizations and government agencies to track and manage funds.

• It involves tracking and reporting on the financial activity of specific funds or grants.

• It ensures that funds are used for their intended purposes and that financial reports are accurate and transparent.

• Examples include tracking donations to a non-profit organization or managing government grants for a specific program.

• Fund accounting is often...read more

NAV is calculated by subtracting liabilities from assets and dividing by the number of outstanding shares.

• Calculate the total value of assets

• Subtract the total value of liabilities

• Divide the result by the number of outstanding shares

• NAV = (Total Assets - Total Liabilities) / Outstanding Shares

• NAV is used to determine the value of a mutual fund or ETF

A bond is a debt security that represents a loan made by an investor to a borrower.

• Bonds are issued by corporations, municipalities, and governments to raise capital.

• They have a fixed interest rate and a maturity date when the principal is repaid.

• Bonds are generally considered less risky than stocks but offer lower potential returns.

• Investors can buy and sell bonds on the secondary market.

• Examples of bonds include U.S. Treasury bonds, corporate bonds, and municipal bonds.

Net Asset Value (NAV) is the value of a fund's assets minus its liabilities, divided by the number of shares outstanding.

• NAV is calculated by subtracting the fund's liabilities from its assets, then dividing by the number of shares outstanding.

• NAV is used to determine the price at which investors can buy or sell shares of a mutual fund or ETF.

• NAV is typically calculated at the end of each trading day.

• For example, if a mutual fund has assets worth $100 million, liabilities of ...read more

Capital market is a financial market where individuals and institutions trade financial securities.

• Capital market facilitates the buying and selling of long-term debt and equity instruments.

• It includes stock markets and bond markets.

• Investors can buy/sell stocks, bonds, and other financial instruments in the capital market.

• Companies raise capital by issuing stocks or bonds to investors in the capital market.

• Examples of capital markets include New York Stock Exchange (NYSE) an...read more

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

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

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

• For example, a stock option derives its value from the underlying stock, while a currency swap derives its value from exchange rates.