Shiprocket Private Limited Interview Questions and Answers

Futures and forwards are both types of derivative contracts, but they differ in terms of their standardization, trading platform, and settlement.

• Futures contracts are standardized and traded on exchanges, while forwards are customized and traded over-the-counter.

• Futures contracts have daily settlement and are marked-to-market, while forwards settle at the end of the contract period.

• Futures contracts have lower counterparty risk due to the involvement of a clearinghouse, while...read more

GAAP and IFRS are two different accounting standards used globally.

• GAAP is used primarily in the United States, while IFRS is used in most other countries.

• GAAP is rules-based, while IFRS is principles-based.

• IFRS allows for more judgment and interpretation in financial reporting.

• IFRS requires more extensive disclosures in financial statements.

• IFRS is considered more flexible and adaptable to changing business environments.

• Some differences include the treatment of inventory, in...read more

Bonds are debt securities issued by companies or governments to raise capital.

• Bonds are essentially loans that investors make to the issuer

• They have a fixed interest rate and a maturity date

• The issuer pays interest to the bondholder until the bond matures

• At maturity, the issuer repays the principal amount to the bondholder

• Bonds are generally considered less risky than stocks

• Examples of bonds include government bonds, corporate bonds, and municipal bonds

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

• Derivatives are contracts between two parties that specify the conditions for buying or selling an asset at a future date and price.

• They are used for hedging, speculation, and arbitrage in financial markets.

• Examples of derivatives include futures contracts, options, swaps, and forward contracts.

Swaps are financial contracts between two parties to exchange cash flows. Types include interest rate, currency, commodity, and equity swaps.

• Interest rate swaps involve exchanging fixed and floating interest rate payments.

• Currency swaps involve exchanging principal and interest payments in different currencies.

• Commodity swaps involve exchanging cash flows based on the price of a commodity.

• Equity swaps involve exchanging cash flows based on the performance of an underlying sto...read more

Futures and options are both derivatives, but futures obligate the buyer to purchase or sell an asset, while options give the buyer the right to buy or sell.

• Futures are contracts that obligate the buyer to purchase or sell an asset at a specific price and date in the future.

• Options give the buyer the right, but not the obligation, to buy or sell an asset at a specific price and date in the future.

• Futures are standardized contracts traded on exchanges, while options are more f...read more