Rating Analyst Interview Questions and Answers

DSCR stands for Debt Service Coverage Ratio and ISCR stands for Interest Service Coverage Ratio. They are financial ratios used to assess the ability of a borrower to meet their debt obligations.

• DSCR measures the cash flow available to cover debt payments, while ISCR measures the cash flow available to cover interest payments.

• Both ratios are important for lenders and investors to evaluate the creditworthiness and risk of a borrower.

• A higher DSCR or ISCR indicates a stronger a...read more

Credit rating is given based on the company's financial health, industry trends, and management quality.

• Analyze financial statements and ratios to determine the company's ability to repay debt

• Consider industry trends and competition to assess the company's market position

• Evaluate management quality and corporate governance practices

• Assign a rating based on the above factors, using a standardized rating scale

• Example: A company with strong financials, a leading market position,...read more

Rating methodology varies across sectors and criteria, using a standardized rating scale.

• Each sector has its own unique rating methodology and criteria

• Rating agencies use a standardized rating scale to rate entities within a sector

• For example, in the financial sector, rating criteria may include financial strength and creditworthiness

• In the healthcare sector, rating criteria may include patient outcomes and quality of care

• The rating scale typically ranges from AAA (highest ra...read more

Credit rating is an assessment of the creditworthiness of an individual, company, or government, indicating the likelihood of default.

• Credit rating is a measure of the borrower's ability to repay debt.

• It helps investors and lenders make informed decisions about lending money or investing in a particular entity.

• Credit ratings are assigned by credit rating agencies based on various factors such as financial stability, past repayment history, and economic conditions.

• Higher credi...read more

Credit rating process evaluates creditworthiness of an entity based on its financial history and future prospects.

• Credit rating agencies analyze financial statements, industry trends, and economic conditions to assign a credit rating to an entity.

• Credit ratings range from AAA (highest creditworthiness) to D (default).

• Credit ratings help investors and lenders make informed decisions about the risk associated with investing or lending to an entity.

• Credit risk evaluation involve...read more

Basel norms are a set of international banking regulations that aim to ensure financial stability.

• Basel norms were first introduced in 1988 and have been updated several times since then.

• The norms require banks to maintain a minimum level of capital adequacy to cover their risks.

• The norms also set out guidelines for risk management and supervision.

• Basel III, the latest version of the norms, was introduced in response to the 2008 financial crisis.

• Basel III introduced stricter ...read more

The technology industry is constantly evolving and driving innovation across various sectors.

• Technology companies focus on developing software, hardware, and services to meet the needs of consumers and businesses.

• Key players in the industry include Apple, Microsoft, Google, and Amazon.

• Emerging technologies such as artificial intelligence, blockchain, and Internet of Things are shaping the future of the industry.