10+ Fund Accounting Analyst Interview Questions and Answers

Different fees applied to mutual funds include expense ratio, front-end load, back-end load, and redemption fee.

• Expense ratio is an annual fee charged by the fund to cover operating expenses.

• Front-end load is a fee charged when purchasing the fund.

• Back-end load is a fee charged when selling the fund.

• Redemption fee is a fee charged when selling the fund within a certain time period.

• Other fees may include account maintenance fees, 12b-1 fees, and exchange fees.

Derivatives are financial instruments whose value is derived from an underlying asset. Trade life cycle refers to the stages involved in a trade from initiation to settlement. Options are financial contracts that give the holder the right, but not the obligation, to buy or sell an asset at a specified price within a specific time period.

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

• Tra...read more

Financial markets refer to the platforms where financial instruments are traded, such as stocks, bonds, and commodities.

• Financial markets are where buyers and sellers come together to trade financial instruments.

• These instruments can include stocks, bonds, commodities, currencies, and derivatives.

• Financial markets can be divided into primary and secondary markets, depending on whether the instruments being traded are newly issued or already existing.

• Examples of financial mark...read more

Hedge funds, mutual funds, and capital markets are financial instruments used for investment and trading purposes.

• Hedge funds are alternative investment vehicles that pool capital from accredited investors and employ various strategies to generate high returns.

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

• Capital markets refer to the financial markets where long-term debt and equity securities a...read more

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

• Derivatives can be used for hedging or speculation

• Examples include futures, options, swaps, and forwards

• Derivatives can be complex and carry high risk

• They are widely used in financial markets

NAV impacts market value by reflecting the current value of a fund's assets and liabilities.

• NAV stands for Net Asset Value and represents the per-share value of a mutual fund or ETF.

• Market value is influenced by changes in NAV, as it reflects the current worth of the fund's underlying assets.

• If NAV increases, it generally indicates a rise in market value, and vice versa.

• Investors use NAV to determine the value of their investments and make buying or selling decisions.

• For exam...read more

Fund accounting role offers a challenging and dynamic work environment with opportunities for growth and development.

• I am passionate about finance and accounting

• I enjoy working with numbers and analyzing financial data

• I am interested in the investment industry and want to learn more about it

• I am excited about the opportunity to work with a team of professionals and contribute to the success of the organization

• I believe that fund accounting is a critical function in the invest...read more

Corporate Actions are events initiated by a publicly traded company that can affect the securities issued by the company.

• Corporate Actions include events such as stock splits, dividends, mergers, acquisitions, spin-offs, and rights issues.

• These events can impact the value of securities held by investors and require adjustments to be made in fund accounting.

• Fund accountants need to accurately record and track Corporate Actions to ensure the proper valuation of investments.

• Exam...read more

Reconciliation process involves comparing two sets of records to ensure they are in agreement.

• Reconciliation process involves comparing financial records, transactions, or statements to identify discrepancies.

• It includes verifying balances, transactions, and other data between different sources.

• Reconciliation helps in identifying errors, fraud, or missing transactions.

• Common types of reconciliations include bank reconciliation, account reconciliation, and intercompany reconci...read more

AIF stands for Alternative Investment Fund, which is a privately pooled investment vehicle that collects funds from investors for investing in different asset classes. Mutual funds are investment vehicles that pool money from multiple investors to invest in securities like stocks, bonds, and other assets.

• AIFs are typically used by high-net-worth individuals and institutional investors to access alternative investment strategies such as hedge funds, private equity, and real es...read more

A derivative is a financial contract whose value is derived from the performance of an underlying asset, index, or entity.

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

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

• Derivatives allow investors to take on risk or hedge against risk without owning the underlying asset.

• The value of a derivative is based on the price movements of the underlying asset.

• Derivatives are traded on exchanges o...read more

A mutual fund is a type of investment vehicle consisting of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

• Mutual funds are managed by professional fund managers who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.

• Investors in a mutual fund own shares of the fund, which represent a portion of the holdings of the fund.

• Mu...read more