20+ Statestreet HCL Services Interview Questions and Answers for Freshers

Trade life cycle includes pre-trade, trade execution, trade confirmation, settlement, and accounting. It functions in various types of trades.

• Trade life cycle involves pre-trade, trade execution, trade confirmation, settlement, and accounting

• It functions in various types of trades such as equity, fixed income, foreign exchange, and derivatives

• In equity trading, the trade life cycle starts with the order placement and ends with the settlement of the trade

• In foreign exchange tr...read more

Capital market, money markets, money market instruments, derivatives and types of derivatives explained.

• Capital market refers to the market for long-term securities such as stocks and bonds.

• Money market refers to the market for short-term securities such as treasury bills and commercial paper.

• Money market instruments are short-term debt securities with high liquidity and low risk.

• Derivatives are financial instruments whose value is derived from an underlying asset or security...read more

Corporate action refers to any event initiated by a company that brings a change to its securities. Dividend is a payment made by a company to its shareholders.

• Corporate action includes events like stock splits, mergers, acquisitions, spin-offs, etc.

• Dividend is a portion of a company's profits paid to its shareholders as a reward for their investment.

• Dividends can be paid in cash or in the form of additional shares.

• Dividend yield is the percentage of the current stock price t...read more

Financial derivatives are contracts between two parties that derive their value from an underlying asset or security.

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

• Futures contracts obligate the buyer to purchase an asset at a specific price and time in the future.

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

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

Fictitious assets are intangible assets with no physical existence. Transactions flow from journal entry to final accounts through various steps.

• Fictitious assets are intangible assets that do not have a physical presence, such as goodwill or deferred revenue.

• These assets are created due to accounting practices or transactions, but do not represent any tangible value.

• In the books of accounts, transactions start with journal entries where the debit and credit sides are recorde...read more

A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in stocks, bonds, or other assets.

• Mutual funds are managed by professional fund managers.

• Investors buy shares in the mutual fund and the value of their investment is determined by the performance of the underlying assets.

• There are different types of mutual funds, including equity funds, bond funds, money market funds, and index funds.

• Equity funds invest in stocks, bond funds inves...read more

Capital market is a financial market where long-term securities are traded.

• It includes stock market and bond market.

• Companies raise capital by issuing stocks and bonds.

• Investors buy and sell securities in the market.

• The market is regulated by government agencies like SEC in the US.

• Examples of capital markets include NYSE, NASDAQ, and London Stock Exchange.

Derivatives, futures, swaps, and bonds are financial instruments used in investment and risk management.

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

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

• Swaps are agreements between two parties to exchange cash flows or liabilities based on predetermined terms.

• Bonds are debt securities issued by governments or corporations ...read more

Primary market is where new securities are issued and sold for the first time.

• It is also known as the new issue market.

• Companies raise capital by issuing new stocks or bonds in the primary market.

• Investors can buy these securities directly from the issuer.

• Examples include IPOs and bond offerings.

• Primary market transactions are facilitated by investment banks.

Investment banking is a type of financial service that helps companies and governments raise capital by underwriting and issuing securities.

• Provides financial advice to clients

• Assists in mergers and acquisitions

• Underwrites and issues securities

• Helps companies raise capital through IPOs

• Examples: Goldman Sachs, JPMorgan Chase, Morgan Stanley

I am a finance professional with expertise in capital markets. Shares represent ownership in a company.

• I have a background in finance and specialize in capital markets

• Shares are units of ownership in a company, representing a claim on its assets and earnings

• Shareholders have voting rights and may receive dividends based on company performance

A custodian is a person or entity responsible for safeguarding and managing assets or property on behalf of others.

• Custodians can be individuals, banks, or other financial institutions.

• They are responsible for the safekeeping of assets such as securities, cash, and other valuables.

• Custodians may also provide additional services such as trade settlement, asset servicing, and reporting.

• Examples of custodians include State Street, BNY Mellon, and JP Morgan.

• Custodians play a crit...read more

Capital market refers to a financial market where individuals and institutions trade financial securities.

• It is a market for buying and selling long-term debt and equity instruments

• It provides a platform for companies to raise capital by issuing stocks and bonds

• Investors can trade securities such as stocks, bonds, and derivatives in the capital market

• Examples include stock exchanges like NYSE and NASDAQ, bond markets, and derivatives markets

A bond is a debt security that represents a loan made by an investor to a borrower, typically a corporation or government.

• Bonds are issued by companies or governments to raise capital.

• Investors buy bonds and receive regular interest payments until the bond matures.

• At maturity, the investor receives the principal amount of the bond.

• Bonds are rated by credit rating agencies based on the issuer's creditworthiness.

• Higher-rated bonds are considered less risky and typically offer l...read more

Capital markets are financial markets where long-term debt or equity securities are bought and sold.

• Capital markets facilitate the buying and selling of long-term financial instruments such as stocks and bonds.

• They provide a platform for companies and governments to raise funds for projects or operations.

• Investors can buy securities in the primary market or trade them in the secondary market.

• Examples include stock exchanges like NYSE and NASDAQ, as well as bond markets.

• Capita...read more

Preliminary expenses are costs incurred before a company starts its operations, such as incorporation fees, legal expenses, and pre-opening marketing costs.

• Preliminary expenses are one-time costs associated with setting up a new business.

• These expenses are typically incurred before the company starts generating revenue.

• Examples of preliminary expenses include incorporation fees, legal expenses, pre-opening marketing costs, and expenses related to obtaining necessary licenses ...read more

Financial market is a platform where buyers and sellers trade financial securities, commodities, and other fungible items.

• Financial markets facilitate the exchange of assets such as stocks, bonds, currencies, and derivatives.

• They provide a platform for companies to raise capital through issuing stocks and bonds.

• Investors can buy and sell financial instruments to earn profits or hedge against risks.

• Examples include stock exchanges like NYSE and NASDAQ, commodity markets, and f...read more

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

• The left side of the balance sheet shows the company's assets, which are resources that the company owns or controls.

• The right side of the balance sheet shows the company's liabilities, which are obligations that the company owes to others.

• The difference between the assets and liabilities is the company's equity, which represents the residual interest in the assets after deducting li...read more

Trade life cycle involves various stages from order placement to settlement.

• Trade initiation through order placement

• Trade execution through matching of buy and sell orders

• Trade confirmation through trade details and settlement instructions

• Trade settlement through exchange of cash and securities

• Trade clearing through reconciliation of trade details and settlement instructions

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 and the value of their investment is determined by the performance of the underlying securities

• Mutual funds offer diversification and liquidity to investors

• There are different types of mutual funds such as equity funds, bond funds, and money market funds

• Examp...read more

Trades typically get settled within a few days after the transaction takes place.

• Trade settlement refers to the process of transferring securities and funds between buyers and sellers.

• The exact timing of trade settlement depends on the type of security being traded and the market in which the trade occurs.

• In most cases, equity trades settle within two business days, while government bonds and corporate bonds settle within one business day.

• Some markets, such as the T+0 settlem...read more

Capital gains tax is a tax on the profit made from selling an asset, such as stocks or real estate.

• Capital gains tax is calculated based on the difference between the purchase price and the selling price of an asset.

• Short-term capital gains are taxed at the individual's ordinary income tax rate, while long-term capital gains have their own tax rates.

• The tax rates for long-term capital gains are generally lower than ordinary income tax rates.

• Certain assets, such as a primary r...read more

Collateral refers to assets or property that a borrower pledges to a lender as security for a loan.

• Collateral is used to mitigate the risk for the lender in case the borrower defaults on the loan.

• It can be in the form of cash, securities, real estate, or other valuable assets.

• The lender has the right to seize and sell the collateral to recover the loan amount.

• Collateral is commonly used in various financial transactions, such as mortgages, car loans, and business loans.

• For ex...read more

Money market interest refers to the interest earned on short-term, low-risk investments in the money market.

• Money market interest is the return earned on investments in short-term debt securities.

• These investments typically have maturities of less than one year.

• Money market interest rates are generally lower than other types of interest rates due to the low risk involved.

• Examples of money market instruments include Treasury bills, commercial paper, and certificates of deposit...read more