Preview Questions Financial Analyst | Role Specific Skill

Question 1: Which adjustment is necessary when analyzing foreign currency transactions in BFSI financial statements?

Which action should you take?

Choose only one option

Translating to the functional currency

Recording only realized gains

Excluding translation reserves

Hedging currency risks

Question 2: When reviewing a bank's quarterly financial report, which factor would be most likely to cause significant fluctuations in profitability between quarters?

Which action should you take?

Choose only one option

Changes in shareholder equity

Changes in loan loss provisions

Changes in deposit levels

Changes in interest rates

Question 3: How do you approach accounting for lease liabilities under IFRS 16 in a financial report for a bank?

Which action should you take?

Choose only one option

I recognize only the lease payments without considering the underlying liability

I recognize lease liabilities on the balance sheet and calculate the right-of-use asset, while adjusting the profit and loss statement

I exclude lease liabilities and treat all leases as operating leases

I capitalize lease liabilities but exclude them from profit and loss calculations

Question 4: When determining the intrinsic value of a bank's equity using a Gordon Growth Model (GGM), which parameter's estimation is typically the most contentious due to changes in regulatory capital requirements?

Which action should you take?

Choose only one option

The risk-free rate used in the model

The long-term growth rate of dividends

The required return on equity

The payout ratio

Question 5: In the context of investment analysis, what does the term "alpha" represent for a portfolio manager in BFSI financial services?

Which action should you take?

Choose only one option

The correlation between the portfolio's returns and the market's returns

The portfolio's return relative to its benchmark, adjusted for risk

The portfolio's volatility compared to the market

The total return of the portfolio

Question 6: What is your approach to evaluating operational risk from a cybersecurity breach in a financial institution?

Which action should you take?

Choose only one option

I assume that cybersecurity risks are minimal and do not adjust my forecasts

I rely on insurance data to account for cybersecurity risks without direct analysis

I assess the probability and impact of a breach using scenario analysis and calculate potential financial losses, including reputational damage

I exclude cybersecurity risk from the risk assessment entirely