Investment Analyst Interview Questions and Answers for Freshers

Startups cannot use comparative analysis as they lack historical data and industry benchmarks.

• Comparative analysis requires historical data and industry benchmarks, which startups lack.

• Startups are often in new and emerging industries, making it difficult to find comparable companies.

• Startups may also have unique business models or products that cannot be compared to existing companies.

• Instead, startups may use other methods such as market research and financial projections t...read more

Startups cannot use DCF model due to lack of historical financial data and uncertainty of future cash flows.

• DCF model requires historical financial data and reliable projections of future cash flows, which startups often lack.

• Startups are often in the early stages of development and have high uncertainty around their future growth and profitability.

• Alternative valuation methods such as comparables analysis or venture capital method may be more appropriate for startups.

• DCF mod...read more

Alpha and beta are measures of investment performance. Alpha measures the excess return of an investment compared to a benchmark, while beta measures the volatility of the investment relative to the market.

• Alpha is a measure of the excess return of an investment compared to a benchmark.

• Beta is a measure of the volatility of an investment relative to the market.

• Alpha indicates how much value an investment manager adds or subtracts from a portfolio's return.

• Beta indicates the s...read more