Preview Questions Financial Analyst | Role Specific Skill

Question 1: What is the purpose of rebalancing a portfolio in BFSI investment planning?

Which action should you take?

Choose only one option

To maintain the desired asset allocation

To adjust to market conditions

To hedge against currency risks

To capitalize on short-term gains

Question 2: In integrating climate transition risk into a bank's credit risk assessment, which modeling approach most effectively captures the impact of carbon pricing, regulatory shifts, and technology changes on borrower default probabilities?

Which action should you take?

Choose only one option

Scenario-based credit risk modeling linking macroeconomic pathways, carbon costs, sector adjustments, and borrower-level PD shifts

Linear regression of PD on historical energy prices

Static PD models based solely on historical default correlations

Simple application of industry-average transition risk multipliers

Question 3: Which factor is most important when determining the strategic asset allocation for a defined benefit pension fund?

Which action should you take?

Choose only one option

Short-term market volatility

Projected liability growth

Liquidity needs for pension payouts

Interest rate environment

Question 4: How do you assess and model the risks associated with inflation for a bank's lending portfolio?

Which action should you take?

Choose only one option

I rely on historical inflation data and assume a fixed inflation rate for forecasting

I exclude inflation risk from my modeling as it is too difficult to predict

I focus only on interest rates and ignore inflation impacts on the loan portfolio

I use inflation-adjusted discount rates and model the impact of inflation on both loan repayments and interest rate risk

Question 5: Which of the following best describes "scenario planning" in financial budgeting for BFSI?

Which action should you take?

Choose only one option

Eliminating variable costs from the budget

Creating a single, fixed budget based on historical data

Developing multiple budget scenarios based on different potential future states

Adjusting the budget to match actual performance

Question 6: How should changes in interest rate assumptions be reflected in the financial projections of a bank?

Which action should you take?

Choose only one option

By adjusting the net interest margin (NIM) and income from loans

By increasing provisions for loan losses only

By incorporating changes in non-performing loan ratios

By assuming no change in cost of funds