Finance Interview questions Faqs

Finance Interview questions Faqs

1) Difference between long term loan and long term debt?

2) Explain liquidity ratios?

3)Types of Depriciation?

4) Define Authorized Capital?

5) Define Dividend and its types?

6) What do you mean fundamental analysis?

7) Explain the meaning of options and derivatives?

8 ) Which Stock Exchange belongs to which country? a) NIKKEI b) DOW C) NYSE

9) What is a Mutual Fund and what does AMC stand for?

10) Difference between Bear and Bull Markets?

11) Explain RONA?

12) What can you find in a P&L Account?

13) What do you mean by IPO and define face value of a share?

14) Difference between Mergers and Acquisitions?

15) Define some GAAP accounting priniciples?

16) Describe NASDAQ?

17) What does a call and a put option mean?

18) What is amalgamation?

19) Explain European Markets?

20) Define a) Networth b) Preference capital c) debenture d) Treasury Bills e) Hedging

21) Who is called a lameduck in a stock exchange?

22) Reduce budget by 10%. Which criteria should be used to identify budget reductions?

23) What is IRR and Discounted cashflow?

Explain FIX protocol and FIX Engine

What is FIX protocol and FIX Engine?
FIX protocol is Industry standard protocol for electronic trading , with evolution with computer technology Trading also getting Electronic and now most of the exchanges in the world are fully electronic and concept of trading floor is taken over by computers. 

When I was new to FIX protocol I have searched net to find a good FIX protocol tutorial but not much is available so I am trying to write my own experience in form of short  FIX protocol tutorial.

In this blog post I would like to share my thoughts, experience and knowledge about FIX protocol which I had acquired by working on different areas of FIX.

FIX protocol is a tag value protocol where every field has a unique tag name and signify something e.g. Price (tag 44) denotes the price of a particular shares , OrderQty denotes quantity of order.
FIX protocol specify different types of messages for different trading purposes e.g. for Sending an Order to exchange they used NewOrderSingle message (MsgType=35) or for Sending a Cancel to exchange they used CancelOrder message (MsgType=F). MsgType (tag 35) and they message for all purpose of trade life cycle e..g they have pre trade message ( e.g. News , Indication of Interest ) , trade message (NewOrderSingle, OrderCancelReplaceRequest , OrderCancelRequest) and post trade message (e.g. Allocation messages).

To understand these FIX message client and broker, the two party involved in trading has a piece of software called FIX Engine. There are many commercial FIX engine available which is used in Industry e.g. Cameron FIX Engine, NYFIX's Appia etc.

Messages on FIX protocol can be broadly classified into two type’s first Session level message also called Admin messages and Second Application level messages. Session level messages is uesd to establish FIX session between two FIX engine and Application messages are messages which is meant for some purpose e..g NewOrderSingle message which is used to send order via FIX.

MsgType (tag 35) is an important tag in FIX protocol which is used to uniquely identify a FIX message. Every single message in FIX protocol must have corresponding MsgType otherwise FIX engine will reject those messages saying it’s not a valid FIX message.

As per FIX protocol connection between two FIX engine is called FIX session and every FIX session has pre agreed host/port and comp id. Since a single FIX engine can be used to server multiple clients on broker side every client is uniquely identified  by combination of IP , port and there Comp IDs , Comp IDs are combination of SenderCompID and TargetCompID which are two separate tag in FIX protocol.
Once FIX Session established now client can send Orders via FIX and broker then send it exchange for execution.

I will try to keep it updated with relevant information, please ask if you have any questions, doubt etc.

Happy learning and welcome to FIX protocol world :)

What is a stop or stop loss order?

What is a stop or stop loss order?
In FINANCIAL INFORMATION EXCHANGE (FIX)  protocol A stop order ( also stop loss order) is an order to buy ( or sell) a security once the price of the security has  reached  above ( or fall below) a specified stop price. When the specified stop price is breached, the stop order is entered as a market order ( no limit).

What is a market order?

What is a market order?
In FINANCIAL INFORMATION EXCHANGE (FIX) protocol a market order is a buy or sells order to be executed by the broker immediately at current market prices. This could prove very dangerous in terms of price because it doesn't care at what price its buying or selling securities.

What is limit order?

What is limit order?
As per FINANCIAL INFORMATION EXCHANGE (FIX)  protocol A limit order is an order to buy a security at no more  than a specific Price (can be bought lower price) or sell at not less than a specific price (can be sold at higher price). This gives the customer some control over the price at which the trade is executed, but may prevent the order from being executed. a limit orders can be executed at on price or better price.

Financial Information exchange What is?

Financial Information exchange What is?
The Financial Information exchange (FINANCIAL INFORMATION EXCHANGE (FIX)  protocol is an electronic communications protocol for international real-time exchange of information related to securities transactions and markets. most of the electronic trading is done in FINANCIAL INFORMATION EXCHANGE (FIX)  , though different exchanges has there own native protocol but most of the broker supports FINANCIAL INFORMATION EXCHANGE (FIX)  protocol.

Difference between an ECN and an exchange?

What is the difference between an ECN and an exchange?
ECN is an Electronic Communication Network ,An electronic system that attempts to eliminate the role of a third party in the execution of orders entered by an exchange market maker or an over the counter market maker, and permits such orders to be entirely or partly executed.
An ECN connects major brokerages and individual traders so that they can trade directly between themselves without having to go through a middleman. Sometimes ECNs are also referred as dark pool.

What is naked short and what is covered short?

What is naked short and what is covered short?
Naked short is when trader sells one stock which they don’t own at that moment. Covered Short Sell means that trader owns stock which they are shorting.

Difference between Sell Orders and Short Sell Orders?

Difference between Sell Orders and Short Sell Orders?
Sell means selling your own securities , short selling means selling securities without owning them normally broker lend securities to user.there are
two kinds of short sell e.g. Covered Short Sell and naked Short Sell, most of the stock exchanges doesn't allow naked short sell because its normally abused to take stock price downward.

What is the difference between a Stock and a Bond?

What is the difference between a Stock and a Bond?
Stock is equity instrument while Bond is debt asset. Since equity is more risky associated with Market Risk it can provide more returns while Bond is
relatively safer instrument so it provide predefined interest called "coupon" though Bond is also associated with Counter Party Risk.

Financial information exchange Java Interview Questions

Financial information exchange Java Interview Questions
1)What is an Exchange?
2)What is the difference between a Stock and a Bond?
3)What is the difference between Sell Orders and Short Sell Orders?
4)What is naked short and what is covered short?
5)What is the difference between an ECN and an exchange?
6)What is FINANCIAL INFORMATION EXCHANGE (FIX) Protocol?
7)What is limit order?
8)What is a market order?
9)What is a stop or stop loss order?

Retail Finance Accountant Interview Questions

Retail Finance Accountant Interview Questions
1.What is the meaning of Processing Vendor/Employee payments?
2.What are the rules of Account ?
3.Which is Debit side and Which is Credit Side in Balance Sheet ?
4.What is 'Rights Issue' ?
5.What is Venture Capital ?
6.What is the Difference between govt ? company and public ltd ? company ?
7.What is Difference between venture capital financing and equity financing ?
8.What is the Income tax updated slab ?
9.What is standing order ?
10.What is forex management ?
11.whah is price earning formula ?
12.What is eps ?
13.who are bulls and bears investors ?
14.What is FDI ?
15.What are the nationalised banks ?
16.How to calculate basic in provident fund under salaries ?
17.What are the financial ratios that a manager see in accounting ?
18.Among financial and cost accounting,which is more important ? why ?
19.What is contingent liabilty, How it sHows in balance sheet ?
20.What is IPO ?
21.How many types of Audit ?
22.What is an asset, an expense, a liability, revenue and equity ?
23.What is thr Differences between sales & sales invoice ?
24.How much deduction want while salary paid ?
25.What is Letter of Credit ?
26.What is State Cheque ?
27.What is inventory ?
28.What is the mean of capital in account ?
29.What is excise return form ?
30.What is the Difference between equity shareholder and prefrence shareholder ?
31.What is delapidation ?
32.What is repo and revers repo ?why they need to use in stock market ?
33.What is reccission ?How it is started ?
34.What is current ratio formula ?
35.What is secondary market ?
36.wat is ledger posting ?
37.What is an acquisition ?What is merger ?
38.What is private equity ?
39.What is joint venture & venture capitaling ?
40.What IS THE TRAIL BALANCE ?
41.What is drawbacks of account ?
42.On What amount of sale Excise Duty levied ?
43.What is a Funds flow statement ?
44.Why is Income statement prepared ?
45.What is the full form of GAAP ?
46.What is the full form and the application of SAP ?
47.What is an ERP ?
48.What do you mean by the term Accounts Payables/ Receivables ?
49.Why do you prepare a Trial Balance ?
50.When will the cash Book have a Credit Balance ?

Financial Advisor Interview Questions

Financial Advisor Interview Questions
1.Tell be the Best Advice you gave in your career ?What raises and downs of it?
2.what is market?
3.what is relationship between concept, hypothesis and theory?
4.what should be the marketing strategy for education sector?
5.When is a "diversification growth strategy" appropriate?
6.what is differance between sales& marketing?
7.what is sales consultant?
8.Which sector is Best for my Finance to grow now? in stocks
9.What are the ever green fields for Investment you feel?

Experienced Finance Interview Questions for Job Interview

MBA Finance Interview Questions at job Interview
Q:Tell me about your educational background?
Q:What do you know about the organization?
Q:How do you justify the job?
Q:Why do you want this job?
Q:What do you want to work with this organization?
Q:Where do you see yourself five years down the line?
Q: What are your strengths?
Q: What is our company’s stock price? How would you forecast the future stock price for next year?
Q: How would you choose to buy a particular stock?
Q: Why might a company choose debt over equity financing?

Finance Interview Questions

Finance Interview Questions
General Questions
Define free cash flow.
Define EVA.
How do you measure Return on Invested Capital?
What is the difference (and advantages/disadvantages) between purchase and pooling accounting methods?
What do you think about the market?/Talk to me about the stock market.
Tell me about some investment books you’ve read lately.
Fixed Income
Graph the price yield relationship of bonds.
What is duration/Macaulry duration/Modified duration? Show me.
What is convexity?
The following are prices of four different bonds: 25, 23, 22, 24. Assuming that you can sell or buy these bonds at no cost, if you know that tomorrow, three of them will go to 0 and one of them, 100, how would you arbitrage? (buy them all)
How would you explain credit spread?
Currency - Foreign Exchange
If the yen/dollar exchange rate is 100yen/$ today and the one year forward rate is 105yen/$, what does this simply?
One plus one half plus one fourth plus one eighth . . . gets closer to a certain number. What is the number and why?
What is the yen/dollar exchange rate today? Where do you think it will be in one year and why?
(After knowing that the interviewee knows the basics of options) If an exporting company wants to pay no more than 110 yen to a dollar and no less than 90 yen to a dollar in 3 months, how would you use option instruments to hedge their position?
Would a price of a call option go up or down when the maturity of the option is longer?
(After knowing that the interviewee took econometrics) What is econometrics? Could you go through the calculation to do regression analysis?
Investment Management
(for fixed income) What does the yield curve look like today and what would be your investment strategy? Valuation questions (look under investment banking)
Tell me about your own portfolio. What is your investment strategy? (answer in technical terms)
If you are given a market or an industry, what would be the steps to evaluate them?
Sales and Trading
What are the qualifications needed to be a good salesman?
How would you make a customer like you even if you don’t like them?
General
What is the Dow Jones today?
What is the Federal Fund rate today?
What is the 30-year T-bond rate today?
Give me a business idea.