800+ Senior Analyst Interview Questions and Answers

Financial analyst interview questions covering DCF model, valuation methods, bond yield, creditworthiness, and credit quality.

• Three statement financial model includes income statement, balance sheet, and cash flow statement.

• Discount rate is calculated using the weighted average cost of capital (WACC) or cost of equity.

• DCF model involves projecting future cash flows and discounting them back to present value.

• Other valuation methods include comparable company analysis (CCA) and...read more

Answering questions related to Transaction Monitoring, Sanctions, Risk Assessment, AML, and Russia sanctions.

• Transaction Monitoring is the process of monitoring financial transactions to identify suspicious activities.

• Sanctioned countries are those that are subject to economic or trade sanctions imposed by governments or international organizations.

• Sectoral sanctions are restrictions on specific sectors of a country's economy, such as energy or finance.

• High risk refers to cus...read more

Budgeting and forecasting involve the process of planning and estimating future financial outcomes.

• Budgeting is the process of creating a detailed plan for income and expenses over a specific period.

• Forecasting involves predicting future financial performance based on historical data and market trends.

• Budgeting helps in setting financial goals, allocating resources, and monitoring financial performance.

• Forecasting assists in making informed decisions, identifying potential ri...read more

The probability of getting 5 Sundays in a 31 day month is less than 1%.

• There are 7 days in a week, so the probability of any given day being a Sunday is 1/7.

• In a 31 day month, there are 4 full weeks and 3 extra days.

• The probability of the first 4 weeks having 4 Sundays is (1/7)^4.

• The probability of the remaining 3 days being Sundays is (3/7).

• Multiplying these probabilities gives a total probability of less than 1%.

I am proficient in several programming tools and rate myself highly in their usage.

• Java - 5

• Python - 4

• SQL - 4

• R - 3

• MATLAB - 3

• Tableau - 4

• Excel - 5

Light both ropes at the same time, when the first rope burns out, light the other end of the second rope.

• Light both ropes at the same time

• When the first rope burns out, light the other end of the second rope

• The 45 seconds mark is when the second rope burns out completely

To increase computer speed, optimize startup programs, remove malware, upgrade hardware, and clear disk space.

• Optimize startup programs to reduce the number of programs running at startup

• Remove malware using antivirus software

• Upgrade hardware such as RAM or SSD

• Clear disk space by deleting unnecessary files and programs

• Disable visual effects to improve performance

Implementing Python Collection Counter from Scratch

• Create an empty dictionary to store the elements and their count

• Iterate through the input list and add elements to the dictionary with their count

• Return the dictionary

• Example: input_list = ['apple', 'banana', 'apple', 'orange', 'banana']

• Output: {'apple': 2, 'banana': 2, 'orange': 1}

Trade confirmation, settlement, reconciliation process and trade lifecycle. Calculation of deal price. Use of Omgeo Alert. CDS, spot, future, swaps.

• Trade confirmation is the process of verifying the details of a trade between two parties.

• Trade settlement is the process of exchanging cash and securities to complete a trade.

• Trade reconciliation is the process of comparing and resolving any discrepancies between the records of the two parties involved in a trade.

• Trade lifecycle ...read more

Categorical features in Linear Regression require encoding using dummy variables. Removing one dummy variable avoids the dummy variable trap.

• Categorical features need to be encoded using dummy variables to be used in Linear Regression

• Dummy variable trap occurs when one dummy variable can be predicted from the others

• Removing one dummy variable avoids the issue of multicollinearity and improves model performance

• Example: Gender (Male/Female) can be encoded as a dummy variable wi...read more

MNCs have suffered data breaches, but recovery is possible.

• In 2013, Target suffered a data breach that affected 40 million customers. They recovered by investing in cybersecurity and offering free credit monitoring to affected customers.

• In 2017, Equifax suffered a data breach that exposed the personal information of 143 million customers. They recovered by offering free credit monitoring and identity theft protection to affected customers.

• MNCs can recover from data breaches b...read more

Active Directory is a Microsoft service that manages user accounts and permissions. MDM and MAM are mobile device management and mobile application management. Microsoft Intune is a cloud-based MDM/MAM solution. Azure Active Directory is a cloud-based identity and access management service. Exchange Active Sync is a protocol used to synchronize email, contacts, and calendar data between servers and mobile devices.

• Active Directory manages user accounts and permissions

• MDM manag...read more

I apply various forecasting methods depending on the data and the context of the problem.

• I use time series analysis for data with a clear trend and seasonality.

• I use regression analysis for data with multiple predictors.

• I use machine learning algorithms such as random forest and neural networks for complex data.

• I also consider qualitative factors such as expert opinions and market trends.

• I continuously evaluate and refine the forecasting method based on the accuracy of the pr...read more

A DBMS is suggested for efficient data management. It offers advantages like data security, scalability, and data integrity.

• DBMS ensures data security by providing access control and authentication mechanisms.

• It allows for efficient data retrieval and manipulation through indexing and query optimization.

• DBMS offers scalability by allowing for easy addition of new data and users.

• It ensures data integrity by enforcing constraints and providing backup and recovery mechanisms.

• Exa...read more

Program to check if a number is power of 3

• Use logarithm to check if the result is an integer

• Check if the number is greater than 0

• Check if the remainder is 0 when the number is divided by 3 repeatedly

To estimate the number of cars in a country, various data sources and statistical methods can be used.

• Collect data from vehicle registration authorities

• Use surveys or sampling techniques to estimate car ownership

• Analyze sales data from car manufacturers and dealerships

• Consider factors like population, income levels, and urbanization

• Utilize satellite imagery or aerial surveys to count cars in specific areas

Binary search technique can be used to find the index of an element in an almost sorted array.

• Binary search is efficient for large arrays.

• The array must be sorted in ascending or descending order.

• If the element is not found, return -1.

• Example: [1, 3, 5, 7, 9], target = 5, output = 2

Matrix multiplication, factorial and Fibonacci series implementation

• Matrix multiplication involves multiplying two matrices to get a third matrix

• Factorial is the product of all positive integers up to a given number

• Fibonacci series is a sequence of numbers where each number is the sum of the two preceding ones

• Factorial can be implemented using recursion or iteration

• Fibonacci series can be implemented using recursion or iteration

Removing duplicate records using first. and last. functions.

• Use the first. and last. functions to select the first and last occurrence of each record.

• Sort the data by the key field to ensure that the first and last records are selected correctly.

• Use the delete statement to remove the duplicate records.

Attribution analysis is a method of analyzing the performance of an investment portfolio. Beta can be negative, implying inverse correlation with the market.

• Attribution analysis is used to determine the sources of an investment portfolio's returns.

• It helps investors understand which investments are contributing positively or negatively to the portfolio's performance.

• Beta is a measure of an investment's volatility in relation to the market. A negative beta implies that the inv...read more

Using Bayes Theorem, find the probability of getting 10 heads given 99 unbiased coins and 1 biased coin.

• Identify the prior probability of getting 10 heads with unbiased coins

• Calculate the likelihood of getting 10 heads with the biased coin

• Use Bayes Theorem to calculate the posterior probability of getting 10 heads given the mix of coins

• Consider the impact of the biased coin on the overall probability

I use a standardized format for reports and consolidate data using tools like Excel or Tableau.

• I use a consistent format for all reports to ensure clarity and ease of understanding.

• I gather data from various sources and use tools like Excel or Tableau to consolidate it.

• I ensure that all data is accurate and up-to-date before consolidating it.

• I create visualizations to help convey the data in a clear and concise manner.

• I collaborate with team members to ensure that all necessa...read more

Accruals are expenses or revenues that have been recognized but not yet paid or received.

• Accruals are a part of accrual accounting, which recognizes transactions when they occur, not when money changes hands.

• Accruals can include expenses like salaries, interest, and taxes, as well as revenues like sales and services rendered.

• Accruals are recorded as journal entries, with a corresponding debit and credit to the appropriate accounts.

• Examples of accruals include unpaid salaries ...read more

Encryption-decryption is the process of converting plain text into a coded message and then back to plain text. Cryptography is the study of secure communication techniques.

• Encryption is the process of converting plain text into a coded message using an algorithm and a key.

• Decryption is the process of converting the coded message back to plain text using the same algorithm and key.

• Cryptography involves techniques for secure communication, including encryption, decryption, and...read more

Establish a niche and focus on personalized service to differentiate from the larger company.

• Identify a specific area of knowledge management where the larger company may not be as strong

• Offer personalized service and tailored solutions to clients

• Leverage technology to streamline processes and improve efficiency

• Build a strong online presence through social media and content marketing

• Partner with other smaller companies to offer a wider range of services

The wealthiest country in the world is Qatar.

• Qatar has the highest GDP per capita in the world.

• It has a strong economy driven by oil and gas exports.

• Qatar invests heavily in infrastructure and has a high standard of living.

AUC value of 50% means the model is performing no better than random guessing.

• AUC (Area Under the Curve) is a metric used to evaluate the performance of a binary classification model.

• An AUC value of 50% means the model is performing no better than random guessing.

• An AUC value of less than 50% means the model is performing worse than random guessing.

• A perfect model would have an AUC value of 100%.

The drawback of scanf() is that it does not handle input validation well, leading to buffer overflow and security vulnerabilities.

• scanf() does not limit the amount of input it reads, leading to buffer overflow if the input is larger than the buffer size.

• scanf() does not handle invalid input well, leading to unexpected behavior or crashes.

• To avoid these issues, input validation should be performed before using scanf(). Alternatively, fgets() and sscanf() can be used for safer ...read more

The terminal growth rate is arrived at by considering the long-term growth prospects of the company.

• Consider the industry growth rate and the company's historical growth rate

• Analyze the company's competitive position and market share

• Evaluate the company's future investment plans and potential for expansion

• Take into account any regulatory or economic factors that may impact growth

• Use a range of values to account for uncertainty and sensitivity analysis

I have working knowledge of various functions in MS Excel and Bloomberg.

• I am proficient in using functions such as VLOOKUP, SUMIF, COUNTIF, and Pivot Tables in MS Excel.

• I have experience in creating financial models and analyzing data using Bloomberg.

• I am familiar with Bloomberg Terminal and its various features such as news, analytics, and financial data.

• I have used Bloomberg to track market trends, analyze financial statements, and create investment reports.

• I am comfortable...read more

Analyzing a company involves assessing its financial health, credit risk, and rating using various ratios and financial modeling techniques.

• Start by analyzing the company's financial statements, including the balance sheet, income statement, and cash flow statement.

• Look for key ratios such as liquidity ratios, profitability ratios, and solvency ratios to assess the company's financial health.

• To assess credit risk, analyze the company's credit history, payment behavior, and fi...read more

Supply chain management is the coordination and management of activities involved in the production and delivery of products and services.

• It involves planning, sourcing, manufacturing, and delivering products to customers.

• It aims to optimize the flow of goods and services, minimize costs, and improve efficiency.

• It includes managing relationships with suppliers, distributors, and customers.

• Examples include inventory management, transportation logistics, and demand forecasting....read more

A computer connects to the internet through a modem or router. Troubleshoot by checking connections and resetting devices.

• A computer can connect to the internet through a wired or wireless connection

• A modem or router is required to connect to the internet

• Check if the modem or router is properly connected and turned on

• Reset the modem or router if necessary

• Check network settings on the computer

• Try restarting the computer or device

• Contact internet service provider for further as...read more

Yes, I have worked with various analytical tools such as Excel, Tableau, and Python.

• I have used Excel for data manipulation and analysis.

• I have created interactive dashboards using Tableau.

• I have written scripts in Python for data cleaning and modeling.

• I am familiar with statistical analysis tools such as SPSS and SAS.

Competitor intelligence involves analyzing various parameters to gain insights into the competition.

• Market share

• Pricing strategy

• Product features and quality

• Marketing and advertising tactics

• Customer reviews and feedback

• Distribution channels

• Financial performance

• Industry trends and regulations

Adhoc reports requested by clients vary depending on their needs and objectives.

• Client may request reports on sales performance, customer behavior, or market trends.

• Reports may be in the form of tables, graphs, or charts.

• Clients may also request customized reports based on specific criteria or filters.

• Adhoc reports are usually requested on a one-time basis and may not follow a regular schedule.

Explanation of encapsulation, polymorphism, cloud computing, HTTP/HTTPS, and 3-tier architecture.

• Encapsulation is the process of hiding implementation details and exposing only necessary information.

• Polymorphism is the ability of an object to take on many forms.

• Cloud computing is the delivery of computing services over the internet.

• HTTP is a protocol for transferring data over the internet, while HTTPS is a secure version of HTTP.

• 3-tier architecture is a client-server archite...read more

To troubleshoot a blank monitor, check power, cables, and settings.

• Check if the monitor is receiving power and turned on

• Check if the cables are properly connected and not damaged

• Check the display settings on the computer

• Try connecting the monitor to a different computer or device

• Check for any error messages or codes on the monitor

• If all else fails, try resetting the monitor to factory settings

Bug life cycle is the process of identifying, reporting, fixing, and verifying software defects. Bugs are logged in JIRA in our current project.

• Bug life cycle includes stages like identification, reporting, triaging, fixing, and verification

• Bugs are usually logged in a bug tracking tool like JIRA or Bugzilla

• Each bug is assigned a unique ID and is tracked until it is resolved

• Bug reports should include steps to reproduce, expected behavior, and actual behavior

• Bug severity and p...read more

Structured finance involves creating complex financial instruments by pooling assets and selling them to investors.

• Structured finance is a way to create customized financial products by pooling assets like mortgages, loans, or bonds.

• These assets are then divided into tranches with different levels of risk and return, and sold to investors.

• Parties involved in structured finance include originators, underwriters, rating agencies, investors, and servicers.

• Examples of structured ...read more

NAV calculation and bank reconciliation are important processes in finance.

• NAV calculation involves determining the net asset value of a fund or investment portfolio.

• Bank reconciliation is the process of comparing a company's bank statement with its own accounting records to ensure accuracy.

• NAV calculation is important for investors to understand the value of their investments.

• Bank reconciliation helps identify discrepancies and errors in financial records.

• Both processes requ...read more

To show count in a cumulative graph, use a line graph with time on x-axis and cumulative count on y-axis.

• Use a line graph to show the cumulative count over time

• Plot time on the x-axis and cumulative count on the y-axis

• Add a label to the y-axis indicating the cumulative count

• Use different colors or markers to differentiate between different data sets

• Include a legend to explain the different colors/markers used

The total number of cricket bats in India can be estimated through market research and analysis of production and import/export data.

• Conduct market research to estimate the demand for cricket bats in India

• Analyze production data of cricket bat manufacturers in India

• Analyze import/export data of cricket bats to/from India

• Consider the popularity of cricket in India and the number of players

• Take into account the lifespan of a cricket bat and the frequency of replacement

Binomial coefficient is used to find the number of ways to choose r items from n items.

• Binomial coefficient formula is C(n,r) = n! / (r! * (n-r)!)

• It is used in probability and combinatorics

• Example: C(5,2) = 10, which means there are 10 ways to choose 2 items from 5 items

The wealth of a country is measured based on various factors such as GDP, income per capita, natural resources, and human capital.

• Gross Domestic Product (GDP) is a commonly used measure of a country's wealth. It represents the total value of all goods and services produced within a country's borders in a specific period.

• Income per capita is another important indicator of a country's wealth. It measures the average income earned by each individual in a country.

• The abundance an...read more

COBRA is a federal law that allows employees to continue their health insurance coverage after leaving their job. Copay is a fixed amount paid by the insured for each healthcare service. Deductibles are the amount the insured must pay out of pocket before the insurance company starts covering costs. HIPAA is a federal law that protects the privacy and security of patient health information.

• COBRA: Federal law for continuing health insurance after job loss

• Copay: Fixed amount pa...read more

To understand customer behaviour based on credit card transaction, I would analyze spending patterns, transaction frequency, and purchase categories.

• Analyze spending patterns to identify high and low spenders

• Analyze transaction frequency to identify regular and irregular customers

• Analyze purchase categories to identify customer preferences and interests

• Use data visualization tools to identify trends and patterns

• Compare customer behavior to industry benchmarks and competitors

• I...read more