Preview Questions Financial Analyst | Role Specific Skill

Question 1: In the context of a growth-oriented investment strategy, which of the following metrics is most relevant to evaluating a stock's potential for long-term capital appreciation?

Which action should you take?

Choose only one option

Price-to-book ratio

Debt-to-equity ratio

Earnings per share (EPS) growth rate

Dividend payout ratio

Question 2: In the context of BFSI, what is the main purpose of "responsibility accounting" within a budgeting framework?

Which action should you take?

Choose only one option

To integrate budgeting with strategic planning

To assign budgetary responsibility to specific managers or departments

To allocate revenues to different departments

To ensure that all budgetary constraints are met

Question 3: In BFSI financial analysis, what is the purpose of "variance investigation," and how does it enhance the budgeting process?

Which action should you take?

Choose only one option

To identify and understand the reasons behind budget deviations

To simplify the budgeting process by ignoring minor variances

To increase the overall budget

To reduce the number of budgetary allocations

Question 4: How would you adjust a financial report if the company undergoes a merger or acquisition?

Which action should you take?

Choose only one option

I rely on historical figures from both companies without adjusting for changes

I combine the financial statements of both companies without adjustments

I perform purchase price allocation (PPA) to allocate the fair value of assets and liabilities, and disclose in the financial statement

I exclude any impact from the merger/acquisition, reporting only the pre-merger results

Question 5: When conducting sensitivity analysis in BFSI, what is the primary variable for stress testing?

Which action should you take?

Choose only one option

Operating expense ratios

Liquidity ratios

Interest rate fluctuations

Loan default rates

Question 6: When forecasting insurance premium growth in emerging markets, which approach best accounts for geopolitical risks, currency volatility, evolving regulatory frameworks, and demographic transitions in the target countries?

Which action should you take?

Choose only one option

Multi-country panel data model incorporating political risk indices, FX forecasts, regulatory shifts, and demographic projections

ARIMA on historical premium data in local currency

Simple GDP elasticity-based model for premium growth

Regression on global insurance premium indices