BNP Paribas Associate Interview Questions and Answers

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging, speculation, or arbitrage.

• Common types of derivatives include options, futures, forwards, and swaps.

• For example, a call option gives the holder the right to buy an asset at a specified price within a certain time frame.

• Derivatives are traded on exchanges or over-the-counter ...read more

Liquidity of an asset refers to its ability to be quickly and easily converted into cash without significant loss in value.

• Liquidity is a measure of how easily an asset can be bought or sold in the market.

• Highly liquid assets can be quickly converted into cash, while illiquid assets may take longer to sell.

• Liquidity is important for investors as it allows them to access their funds when needed or take advantage of...read more

Trade lifecycle refers to the stages involved in a trade from initiation to settlement.

• The trade lifecycle includes trade initiation, trade capture, trade confirmation, trade matching, trade settlement, and trade reconciliation.

• During trade initiation, the trader decides to buy or sell a security.

• Trade capture involves recording the details of the trade, such as the security, quantity, and price.

• Trade confirmation...read more

OTC market trades happen through direct negotiations between buyers and sellers.

• OTC market trades are not conducted on a centralized exchange.

• Buyers and sellers negotiate directly with each other to agree on the terms of the trade.

• OTC trades are typically conducted between large financial institutions and involve high-value securities such as bonds, derivatives, and commodities.

• OTC trades are not subject to the sa...read more

Derivatives are financial instruments whose value is derived from an underlying asset. Capital market refers to the market for long-term securities. Money market deals with short-term borrowing and lending.

• Derivatives are contracts between two parties that derive their value from an underlying asset, such as stocks, bonds, commodities, or currencies.

• Capital market is where long-term securities like stocks and bond...read more