Preview Questions Financial Analyst | Role Specific Skill

Question 1: In analyzing the economic cycle, which phase is most likely to result in a reduction in the demand for bank loans?

Which action should you take?

Choose only one option

Recovery

Expansion

Recession

Peak

Question 2: How do you handle investments in foreign currencies, particularly with respect to exchange rate risk?

Which action should you take?

Choose only one option

I avoid foreign currency investments entirely due to exchange rate volatility

I use historical exchange rates to forecast future returns

I perform a currency risk analysis using hedging strategies, such as forwards or options, to mitigate exchange rate risk

I assume currency risk is negligible and ignore it in my investment analysis

Question 3: Which of the following best describes the Efficient Market Hypothesis (EMH) in investment analysis?

Which action should you take?

Choose only one option

Markets are inefficient, and it is possible to consistently achieve higher returns than the market average

Markets quickly incorporate all relevant information, making it difficult to consistently outperform them

Markets are always perfectly efficient and reflect all available information

Markets are only efficient in the long run

Question 4: What is the key challenge in building a financial model for a BFSI startup?

Which action should you take?

Choose only one option

Limited historical data

Assessing regulatory impacts

Complexity of valuation models

Estimating operational expenses

Question 5: How does a high public debt-to-GDP ratio affect BFSI institutions?

Which action should you take?

Choose only one option

Increases lending risks

Raises interest rates

Reduces economic growth

All of the above

Question 6: What is the most effective way to handle volatile market conditions in a financial forecast?

Which action should you take?

Choose only one option

By using a static model and ignoring market volatility

By relying only on internal data and ignoring external factors

By reducing the forecast horizon to reduce uncertainty

By adjusting assumptions regularly based on market indicators and risks