Finance Releated Interview Questions

8/13/2019 Finance Releated Interview Questions

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why one rupee note is signed by the ministry of finance? is governer has the right to sign this note? is there any

interference by the rbi? as rupess is the currency of our country and only govt hasthe authority to issue indian currency it has been signedny ministry of finance, all other notes are bearer noteswhich are signed by governor.

no interference by rbi.

rbi has the right to print currency notes in the country except coins & 1 renote which are issued by govt. thus, it bears the sign of mof.

who is a more senior creditor, a bondholder or stockholder?

the bondholder is always more senior. stockholders (including those whoown preferred stock ) must wait until bondholders are paid during abankruptcy before claiming company assets.

according to the classification, the claim of bond holder should beaccounted first. after fulfilling all the claims of bond holder company shouldlook after the stock holder.

what is accounting management?

accounting management is the pratical application of managementtechni ues to control and report on the financial health of the organisation.it involves the analysis, planning, implementation and cotrol of programsdesigned to provide financial data reporting for managerial decisionmaking.

the process of identifying, measuring, analy!ing, interpreting, andcommunicating information for the pursuit of an organi!ation"s goals. this isalso known as #cost accounting.#the key difference between managerial and financial accounting is thatmanagerial accounting information is aimed at helping managers within theorgani!ation make decisions. in contrast, financial accounting is aimed atproviding information to parties outside the organi!ation.
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what is treasury bills? treasury bills are money market instruments to finance theshort term re uirements of the government of india. these are discountedsecurities and thus are issued at a discount to face value.

a treasury bill (known as t$bill) is an instrument of money market , used tofinance short term re uirements of government of a country. a t$bill isissued at a rate lower than the face value, and redeemed at face value onmaturity, this difference is the rate of interest on t$bill. this rate of interestis called risk free rate of the country.

when should a company issue stock rather than debt to fund its operations?

there are several reasons for a company to issue stock rather than debt.the first is if it believes its stock price is inflated, and it can raise money (onvery good terms) by issuing stock. the second is when the pro%ects forwhich the money is being raised may not generate predictable cash flows inthe immediate future. a simple example of this is a startup company. theowners of startups generally will issue stock rather than take on debtbecause their ventures will probably not generate predictable cash flows,which is needed to make regular debt payments, and also so that the riskof the venture is diffused among the company"s shareholders. a thirdreason for a company to raise money by selling e uity is if it wants tochange its debt$to$e uity ratio. this ratio in part determines a company"sbond rating . if a company"s bond rating is poor because it is struggling withlarge debts, they may decide to issue e uity to pay down the debt.

according to me,the sprit of writer may be right but explanation is wrong.insecond point he explaned that company raise funds by e uity becauseventure is not able to generate enough funds to make regular debtpayments but in this case shareholders or venture capitalist will also notinvest in that company which is not profitable as shareholders expectationsof return are generally higher than creditors as they bear higher risk.even abusinessman will not like to do a business wich is not profitable instead hewill park his money somewhere else.
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the main reasons for raising funds through e uity are $1.when pro%ect is long term in nature and payback period is high.'.when company is already debt laden then it will not be very easy to raisedebt or it will be costly,it will be better to raise e uity to balance risk level.

what is networth? networth is the total assets minus total liabilities of a company.

networth means e uity and it is the current assets minus current liabilities of a company.

what is trial balance? it is statement of balances of all the accounts in the ledger

prepared to prove the arithmetical accuracy of the books of accounts.

a trial balance is a list of debit and credit or a list of debit & credit balanceof all the ledger accounts prepared on any particular date#

what is the punch line of %ob? no matter how efficiently goods services areproduced, ifthey cannot be delivered to the customer in the uickestpossible time it is vain.

no matter how efficientley and effectiveley provide services to the societysatisfied the consumer needs,wants,demands is most important

what is raroc? raroc is a risk$ad%usted framework for profitability measurementand profitability management. it is a tool for measuring risk$ad%ustedfinancial performance. and it provides a uniform view of profitability acrossbusinesses (strategic business units divisions). raroc and related conceptssuch as rorac and rarorac are mainly used within (business lines of) banks
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and insurance companies. raroc is defined as the ratio of risk$ad%ustedreturn to economic capital .

raroc stands for risk ad%usted return on capital

please give me the name of nationalise banks in 1 *+ only? the government of indian firstphase 1 nationali!ed banks1. bank of india'. union bank of india-. bank of baroda

. bank of maharashtra

. pun%ab national bank/. indian bank0. indian overseas bank*. central bank of india

. canara bank1+. syndicate bank11. united commercial bank1'. allahabad bank1-. united bank of india1 . dena bank

'nd phase / banks in *+s1. andhra bank'. corporation bank- new bank of india

. oriental bank of commerce

. pun%ab and sindh bank/. vi%aya bank

what is the difference between real money & nominal money? nominal money is related to themeasure of counting. nominal br2figure is what is written on the bill.where as real money br2relates to it"s purchasing power . br2foreg br2if 1+ units in nominal money can buy ' chocolates in 1 *+ and


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br21 chocolate in '+++, in the same way, 1+ units of nominal br2moneyis 1+units of real money in 1 *+ and units of real br2money in '+++.

nominal money relates more to it"s measure of counting $ so nominal figureof what is written on bill, while #real# relates more to it"s purchasing power(usually between some periods of time). for instance 1++ units in nominalcould buy ' units of good in 1 + and 1 unit of good in '++ , at the sametime real value of this 1++ nominal units are 1++ real units in 1 + and +real units in '++ .

same is with gdp. in nominal it can rise due to inflation while it can stay thesame or even decrease in real value.

what did the s&p ++ close at yesterday? another uestion designed to make sure that acandidate is sincerely interested in finance. this uestion (and others like it$ #what"s the dow at now?# #what"s the yield on the long bond?#) can beexpected especially of those looking for sales and trading positions.

another uestion designed to make sure that a candidate is sincerely

interested in finance. this uestion (and others like it $ #what"s the dow atnow?# #what"s the yield on the long bond?#) can be expected especially ofthose looking for sales and trading positions.

is the dividend paid on common stock taxable to shareholders? preferred stock? is it tax deductible for the

company? the dividend paid on common stock is taxable on two levels in theu.s. first at the firm level, as a dividend comes out from the net incomeafter taxes (i.e., the money has been taxed once already) and then at theshareholder level. the shareholders are taxed for the dividend as ordinaryincome (o.i.). dividend for preferred stock is treated as an interest expenseand is tax$free at the corporate level.

according to indian income tax act a person whateaver earn from dividendand sale of stock are fully exampted becouse a company already paid tax
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on income he distribute dividend on net profit after tax i.e.income availablefor shareholders.and earning from sell of share we already paid as taxthrow demat a c.

what is the difference between %ournal entry & ledger

a %ournal is also called as a book of prime entry.transactions occured are first entered in this book to showwhich accounts should be debited and which should be credited.

on the basis of entries made in the %ournal, accounts areprepared, the book which contains the accounts is called aledger. transactions entered in the %ournal are classifiedaccording to their nature and posted in their respectiveaccounts in ledger. it is also called as book of final entry.

a %ournal is also called as a book of prime entry.transactions occured are first entered in this book to showwhich accounts should be debited and which should be credited.

on the basis of entries made in the %ournal, accounts areprepared, the book which contains the accounts is called a

ledger. transactions entered in the %ournal are classifiedaccording to their nature and posted in their respectiveaccounts in ledger. it is also called as book of final entry.

what is crossover rate?

crossover rates have to do with the amount of earnings thatare generated by two different but similar pro%ects. the

crossover rate is the point at which the two pro%ectsachieve the same net present value . in terms of investments,calculating a crossover rate between two similar securitiescan help an investor determine what to buy and what to sell.


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when comparing two different but similar pro%ects, the specific returnsre uired for the pro%ects to have the same net present value. because twosimilar securities may have different volatility, calculating the crossoverrate helps to determine which will be more profitable in the short and long terms. for example, one dotcom company may achieve a steady rate of

growth, but only slowly over time, while a second dotcom may achieve thesame returns in a shorter timeframe, but with greater vulnerability tomarket downturns. calculating the rate at which each will achieve a desirednet present value, assuming no massive changes in circumstances, mayhelp an investor make decisions regarding which to buy and which to sell.

Finance Releated Interview Questions

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