Financial Analyst Interview Questions
Interviewers will expect financial analyst candidates to be well-versed in financial markets, modeling, and analysis. Make sure you are comfortable with both micro and macroeconomics. In addition to highly technical questions, be ready to answer a few behavioral questions that will show off your communication and collaboration skills.
Top Financial Analyst Interview Questions & How to Answer
Here are three top financial analyst interview questions and how to answer them:
Question #1: What is EBITDA, and what is left out of it?
How to answer: This question lets you showcase your knowledge of financial analysis. Mention that EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and many companies use this to assess their overall financial standing. Also, let the interviewer know that the acronym doesn't include the cost of capital investments like property.
Question #2: What process do you use to create accurate sales reports?
How to answer: Discuss the industry-designed software tools you use to produce accurate financial reports and gauge the financial situations of companies accurately. Talk about how you analyze more specific areas and advise the business about the policies they should change for better profits after looking at the initial report.
Question #3: Do you hold any current industry licenses or certifications? If so, why did you get them?
How to answer: Talk about your licenses and certifications, and let the interviewer know that you got them to improve your competency, learn more about the latest financial analysis techniques, and increase your appeal to potential clients. For example, many financial analysts have a Chartered Financial Analyst or CFA certification from the Corporate Finance Institute.
decompose the CAPM model and discuss limitations
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Capital Asset Pricing Model (CAPM) consists of E(r) = Rf + B(Rm-Rf) Rf1 = Risk free rate which usually consists of Beta = company's stock performance against stock market Rm = Expected return from market CAPM ASSUMPTIONS Investors hold diversified portfolios This assumption means that investors will only require a return for the systematic risk of their portfolios, since unsystematic risk has been removed and can be ignored. Single-period transaction horizon A standardised holding period is assumed by the CAPM in order to make comparable the returns on different securities. A return over six months, for example, cannot be compared to a return over 12 months. A holding period of one year is usually used. Investors can borrow and lend at the risk-free rate of return This is an assumption made by portfolio theory, from which the CAPM was developed, and provides a minimum level of return required by investors. Less
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The CAPM which is E(r) = Rf + Beta *(Rm A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. Capital Asset Pricing Model (CAPM) The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is represented by the risk-free (rf) rate in the formula and compensates the investors for placing money in any investment over a period of time. The other half of the formula represents risk and calculates the amount of compensation the investor needs for taking on additional risk. This is calculated by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf). Less
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small company premium, international premium, etc
Describe the three financial statements to someone who doesn't know what they are.
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Financial statement include: income statement, Balance sheet. and Cash Flow. 1.An income statement is a report that shows how much revenue a company earned over a specific time period 2.Cash flow statements report a company’s inflows and outflows of cash. This is important because a company needs to have enough cash on hand to pay its expenses and purchase assets. While an income statement can tell you whether a company made a profit, a cash flow statement can tell you whether the company generated cash. 3.A balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity. Less
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Hey how did you find out you didn't get it?
How would you handle an irrate internal customer during a business meeting?
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I would definetly keep my cool and act very professional and say... I understand your concerns. Please send me your issues in an email and I will make sure I set up a conference call so we can discuss them in further detail. Less
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Good indication of behaviors that are common in this organization. No job is worth total humiliation. Less
Tell me about a time when you were working in a team and your opinion was challenged.
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I asked the team member to explain their opinion. No one is perfect, so keeping an open mind when listening to a team member’s response is key. There were times a team member could convince me they were right and other times when I could explain why my opinion may be the better option. Less
What is the probability of throwing 11 and over with 2 dices
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The answer is 1/12 because there are two ways of rolling 11, rolling a 5 and a 6 or rolling a 6 and a 5 (for probability purposes there are indeed two different results). There is only 1 way to roll over 11 (two 6's). That means that out of 36 possible combinations, 3 qualify as being equal to or greater than 11, which means that the probability is 3/36, which reduces to 1/12. Less
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1/12
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The answer is there are 6 sides on each die, therefore, 6 times 6 is 36, giving us all the possible outcomes. You can roll an 11 one of two ways a, 5 and a 6 or a 6 and a 5. You can roll a 12 only one way. This gives us 3 possible outcomes of 11 or over out of 36. Which reduces to 1/12. Less
About derivatives,swaps, forward and future contract etc, about hedging, depth questions on capital budgeting.
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did u get offer letter
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No friend
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its time waste guys better to apply for another
You have a bat and a ball. The bat is 1 dollar more than the ball and they both add up to 1.50. How much are each?
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1.25 and 0.25
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1.25 for the bat and .25 for the ball... You could not value the bat at 1.50 or 1.00, because they are not equal to 1 dollar more than the ball. Less
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1.25 for the bat and .25 for the ball... You could not value the bat at 1.50 or 1.00, because they are not equal to 1 dollar more than the ball. Less
You are to write a method getMissingLetters, which takes a String, sentence, and returns all the letters it is missing (which prevent it from being a pangram)
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Strong no hire
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#!/usr/bin/perl $s='The good brown fox, hi.'; print join '', map {$s!~/$_/?$_:''} a..z; Less
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#!/usr/bin/python """\ Example solution using Python """ import string def getMissingLetters(sentence): """Use sets to find unused characters from the alphabet """ return ''.join(set(string.lowercase)-set(sentence.lower())) Less