Preview Questions Financial Analyst | Role Specific Skill

Question 1: What strategy would you employ to forecast administrative expenses for a financial institution?

Which action should you take?

Choose only one option

I assume expenses will remain constant based on last year's figures

I exclude administrative expenses from the budget to focus only on core functions

I analyze historical expense trends, inflation rates, and planned organizational changes, then project future costs

I rely on departmental estimates without verification

Question 2: In assessing liquidity risk for a financial institution, which of the following is the most important metric?

Which action should you take?

Choose only one option

Net stable funding ratio (NSFR)

Quick ratio

Return on assets (ROA)

Debt service coverage ratio (DSCR)

Question 3: What is the primary benefit of using rolling forecasts for budgeting purposes?

Which action should you take?

Choose only one option

They adjust budgets to account for unexpected changes

They provide more accurate long-term forecasts

They remove the uncertainty in forecasting

They eliminate the need for manual adjustments

Question 4: When constructing a financial model for a BFSI firm, how should an analyst incorporate loan loss provisions?

Which action should you take?

Choose only one option

As an operating expense on the income statement

As a tax deduction in the forecast

As an adjustment to the balance sheet for impaired loans

As a non-cash item in the cash flow statement

Question 5: How do foreign exchange reserves impact economic stability for BFSI institutions?

Which action should you take?

Choose only one option

Reduce inflation

Stabilize exchange rates

Increase credit demand

Boost market liquidity

Question 6: What approach do you take when forecasting the potential financial impact of geopolitical risks on an investment portfolio?

Which action should you take?

Choose only one option

I assume geopolitical risks have no impact on the portfolio's performance

I use scenario analysis to assess potential risks and adjust return assumptions accordingly, accounting for geopolitical factors

I exclude geopolitical risk from the forecast, assuming stability in global markets

I focus on historical returns and ignore potential geopolitical impacts