Assistant Deputy Manager Interview Questions and Answers

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities.

• Mutual funds are managed by professional fund managers who make investment decisions on behalf of the investors.

• Standard deviation is a measure of the dispersion of returns for a given security or portfolio.

• IRR (Internal Rate of Return) is a metric used to evaluate the profitability of an investment.

• Alpha measures the excess return of a fund compared...read more

XIRR is a financial metric used to calculate the internal rate of return for a series of cash flows. Real return is the return on an investment after adjusting for inflation. Nominal return is the return on an investment without adjusting for inflation.

• XIRR is used in finance to calculate the internal rate of return for a series of cash flows.

• Real return takes into account the impact of inflation on investment returns.

• Nominal return does not adjust for inflation and simply me...read more

Sharpe ratio is a measure of risk-adjusted return, calculated by dividing the excess return of an investment by its standard deviation.

• Sharpe ratio helps investors understand the return of an investment compared to its risk.

• It is calculated by subtracting the risk-free rate from the return of the investment, and then dividing by the standard deviation of the investment's returns.

• A higher Sharpe ratio indicates better risk-adjusted performance.

• For example, if an investment has...read more

Treynor ratio is a measure of risk-adjusted return based on systematic risk.

• Treynor ratio = (Return of portfolio - Risk-free rate) / Beta

• It measures how much excess return a portfolio generates per unit of systematic risk

• A higher Treynor ratio indicates better performance in relation to the amount of risk taken

• It is useful for comparing the performance of different investment portfolios