1000+ 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

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%.

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

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

Estimate the number of pens needed for a company with 100,000 employees based on usage patterns.

• Assume each employee uses 2 pens per month.

• Calculate total monthly usage: 100,000 employees * 2 pens = 200,000 pens.

• Consider a 12-month supply: 200,000 pens * 12 months = 2,400,000 pens.

• Factor in loss and breakage, estimate an additional 10%: 2,400,000 * 1.1 = 2,640,000 pens.

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

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

Hedge funds are alternative investment vehicles that use various strategies to generate high returns. Valuation is the process of determining the worth of an asset. Management fee is a fee charged by hedge fund managers for managing the fund.

• Hedge funds are not regulated by the SEC and are only available to accredited investors.

• Valuation can be done using various methods such as discounted cash flow, market multiples, and precedent transactions.

• Management fee is typically cal...read more

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}

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

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

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

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

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%.

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

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

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

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

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

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

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

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