10+ Interview Questions and Answers

Derivatives are financial contracts that derive their value from an underlying asset. They can be exchange-traded or over-the-counter (OTC). Corporate actions refer to events that affect a company's stock price.

• Derivatives are contracts that derive their value from an underlying asset, such as stocks, bonds, or commodities.

• There are two types of derivatives: exchange-traded and over-the-counter (OTC). Exchange-traded derivatives are standardized contracts that trade on organi...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 predetermined price and date.

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

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

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

Derivatives are financial contracts that derive their value from an underlying asset. Types include futures, options, swaps, and forwards.

• Derivatives are contracts between two parties that derive their value from an underlying asset.

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

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

• Swaps involve exchanging cash flows based on differ...read more

Primary market is where new securities are issued, while secondary market is where already issued securities are traded.

• Primary market involves the sale of new securities to the public for the first time

• Secondary market involves the trading of already issued securities among investors

• Primary market helps companies raise capital for their business operations

• Secondary market provides liquidity to investors who want to buy or sell securities

• Examples of primary market include IPO...read more

Financial markets are platforms where buyers and sellers trade financial assets such as stocks, bonds, currencies, and commodities.

• Financial markets facilitate the flow of capital between investors and borrowers.

• They provide a mechanism for price discovery and risk management.

• Examples of financial markets include stock exchanges, bond markets, foreign exchange markets, and commodity markets.

• Financial markets can be classified as primary markets or secondary markets.

• Primary ma...read more

Corporate Action refers to any event initiated by a publicly-traded company that affects its shareholders.

• Corporate actions can be voluntary or mandatory.

• Examples of corporate actions include stock splits, dividends, mergers and acquisitions, and spin-offs.

• Corporate actions can have a significant impact on the value of a company's stock and the wealth of its shareholders.

• Investors need to stay informed about corporate actions to make informed investment decisions.

Capital Markets are financial markets where long-term securities such as stocks, bonds, and other investments are bought and sold.

• Capital Markets are where companies and governments raise funds by issuing securities to investors

• These markets are divided into primary and secondary markets

• Primary markets are where new securities are issued and sold to the public for the first time

• Secondary markets are where existing securities are bought and sold between investors

• Examples of ca...read more

Money Markets are financial markets where short-term financial instruments are traded.

• Money Markets deal with short-term financial instruments such as treasury bills, commercial papers, certificates of deposit, etc.

• They are used by governments, corporations, and financial institutions to manage their short-term cash needs.

• Money Markets are considered to be safe and low-risk investments.

• They are regulated by central banks and other financial regulatory bodies.

• Examples of Money...read more

Impacted factors in NAV include market conditions, interest rates, company performance, and economic indicators.

• Market conditions such as volatility and liquidity can impact NAV

• Interest rates affect the value of fixed income securities in the NAV

• Company performance, such as earnings and dividends, can influence NAV

• Economic indicators like GDP growth and inflation can also impact NAV

A mutual fund is a type of investment vehicle made up of a pool of money collected from many investors to invest in securities.

• Mutual funds are managed by professional fund managers.

• Investors buy shares in the mutual fund, which represents a portion of the holdings of the fund.

• The value of the shares is determined by the performance of the underlying securities in the fund.

• Mutual funds offer diversification and convenience for investors.

• Examples of mutual fund companies inclu...read more

Assets are resources owned by a company or individual that have economic value and can be used to generate revenue.

• Assets can include cash, investments, property, equipment, and inventory.

• They are typically listed on a company's balance sheet and can be tangible or intangible.

• Assets are important for determining the financial health and value of a business.

• Examples of assets include buildings, vehicles, patents, trademarks, and accounts receivable.

An option is a financial derivative that represents a contract sold by one party to another.

• An option gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price before or on a specified date.

• There are two types of options: call options (which give the buyer the right to buy the underlying asset) and put options (which give the buyer the right to sell the underlying asset).

• Options are commonly used in stock trading, commodities, ...read more

Swaps are financial agreements between two parties to exchange cash flows or assets in the future.

• Swaps are commonly used in the financial markets to manage risk or speculate on market movements.

• There are different types of swaps such as interest rate swaps, currency swaps, and commodity swaps.

• In an interest rate swap, two parties exchange interest rate payments, typically fixed for floating or vice versa.

• Currency swaps involve exchanging principal and interest payments in di...read more

NAV stands for Net Asset Value, which represents the per-share value of a mutual fund or exchange-traded fund (ETF).

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

• It is used to determine the price at which investors can buy or sell shares of the fund.

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

• For example, if a mutual fund has assets worth $100 million, liabilities of $10 million, and 1 mil...read more