55 Things You Want to Know About the Stock Market (With Sample Answers)
Starting a job in banking or investing can be a good way to make money and improve your professional skills. If you’re going to a job interview in the capital market, it can help to look over some common questions. Once you know what kinds of questions you might be asked at the interview, you can plan your answers and feel more ready and confident. This article talks about 55 common interview questions about the capital market and gives some sample answers.
The interviewer can learn more about you as a person from how you answer general questions. They let you show off your personality, your interests, and any other information about yourself that wasn’t on your resume. They also give the interviewer a chance to see if you fit in with the company’s culture. It might be helpful to learn about the company’s values before going to the interview. Here are some examples of general questions about the capital market that could be asked in an interview:
- Why did you choose to work in this field?
- What would you say is one of your weaknesses?
- Why do you want to change jobs?
- If you were to get the job, when could you start?
- Who do you look up to in your field, and why?
- Why should this company hire you?
- Which companies’ values make you want to work for them?
- What are some of your best qualities?
- How long do you think you’ll keep working here?
- What do you want to learn from this job?
- What do you like to do when you don’t have to work?
- Are you willing to move if you get the job?
- How did you find out about our company?
- What traits do you want a boss to have?
- How do you keep yourself going at work?
- What kind of salary and benefits do you want?
- In five and ten years, where do you want to be in your career?
- What got you interested in working for us?
- Do you mind working at weird hours?
- Please tell me about yourself.
Experience and background questions
By asking you about your experience and background, the interviewer can learn more about your work history. The person probably looked at your resume before agreeing to meet with you. They might still have questions about your qualifications, though. Here are some questions about your background and experience that you might be asked:
- What was the most important thing you did well at work?
- What did you learn from a mistake you made?
- Have you ever worked at a business like ours?
- What do you think your former coworkers would say about you?
- What did you learn in school that helped you prepare for this job?
- What are some of the most difficult decisions you’ve had to make?
- At your old jobs, did you usually work alone or with a group? Which do you prefer?
- Have you taken any classes or workshops outside of school that have helped you do your job better?
- Do you know how to do your job with computers and digital programmes?
- When you’ve worked in this field before, what tools have helped you the most?
- What was your schedule like at your last job, and did you ever work strange hours?
- Tell me about a time when you solved a problem before it got out of hand.
- Could you tell me about a time when something went wrong at your last job?
- What are three things you learned at your last job that you think you could use here?
- What do you think your past jobs have taught you that has helped you get ready for this one?
When you’re asked specific questions, the interviewer can see how well you know the business. They also give you a chance to show off your knowledge by getting ready to answer any hard questions you might be asked in the room. When answering detailed questions, it can be important to make sure that your answers are both complete and short. If you don’t know the answer to a question, it’s usually better to say “I don’t know” than to make up an answer that might be wrong. Here are some examples of in-depth questions that people often ask:
- Can you describe your process for evaluating a company’s value?
- What is a PEG multiple, and when would you use one?
- What kind of thing is an FX forward?
- What does a convertible bond mean?
- When might a business use a convertible bond?
- Why does this business need underwriting?
- How does one “wash” money?
- How do you think an investment analyst spends his or her day?
- How do you think an investment banker spends his or her day?
- What are the biggest differences between commercial banking and investment banking?
- How do shares of companies that aren’t on the stock market get priced?
- How do you figure out how much money a business has to work with?
- Can you tell me about a company you want to invest in or already do, and explain why?
- What is the difference between leveraged finance teams and debt capital markets in the world of investment banking?
There are 6 questions about the stock market, and each one has an example of how to answer it.
Here are some sample questions and answers you can use to prepare for a job interview in the capital market:
1. What is net present value?
This is a common question in interviews for jobs in the capital market because it lets the interviewer see how much you know about money. When answering this question, it can help to look up a textbook definition of the word and then rephrase it in a way that makes your answer sound more thoughtful.
Example: “”Net present value,” or “NPV,” is a financial term that refers to a company’s cash flow. It’s a number that shows how much money is coming into a business and how much is going out. By figuring out what this value is, investors can learn a lot about how a company works.”
Which costs more: debt or ownership?
This question gives you a chance to talk about the financial industry in more detail. If the interviewer asks you this question, they are probably trying to find out how much you know about the capital market. If you give a long answer, they might be impressed.
Example: “The cost of equity is always higher than the cost of debt for a number of reasons. One of the most important things to think about when choosing between debt and equity is that the cost of borrowing with debt is tax-deductible. Equity is also more expensive because investors don’t always get fixed payments like lenders do. Also, debt has more weight than equity in a company’s financial structure if the company goes bankrupt or has to be liquidated. This means that lenders will get paid first, which also lowers the risk of debt.”
3. What does “WACC” stand for?
This question is meant to test how well you know industry terms and how people in the financial field use them. Studying the different terms that people who work in the capital market use could be a good way to get ready for the interview if this question or one like it comes up. If you know how to speak the language that people in your field use, you can look more confident and ready during the interview.
Example: “WACC stands for weighted average cost of capital. Based on how much each share is worth, this is how the capital of a company is worked out. WACC looks at every way a business makes money. This includes tax, debt, equity, and how the company’s assets lose value over time.”
What does monetary policy do?
This question gives the interviewer another chance to see how well you know the basic rules of working in a capital market position. If you want to show that you know a lot about how the capital market works, it’s best to be honest when you answer this question.
Example: “The government uses monetary policy to control how much money their country has. Policy about money has a big effect on how much money is in the market. The price of money and the interest rate on it are also affected by how the government handles money. Governments usually try to keep the economy stable and help it grow when they make decisions about monetary policy.”
5.Can a company sell equity shares to the public even if it hasn’t paid off all of its partially paid shares?
If the interviewer asks you these kinds of questions, it could be to see how much you know. Interviewers often ask questions that are harder than what the person was expecting. We do this to see how they react. If the interviewer asks you a tough question like this and you know the answer, it’s a good chance to show how smart you are by giving a clear answer.
Example: “Yes, a company can sell equity shares to the public even if their partially paid shares are not fully consolidated. This is because equity shares represent capital that wasn’t part of the preference shares. In this case, it’s important to remember that the company’s directors must decide within a year of the share allotment if they want to offer shares to existing holders of equity in proportion to the amount of debt that hasn’t been paid in that holder’s name at the time.”
How do companies on a stock exchange decide how much to charge for each share?
Interviewers can figure out if you’re right for the job by asking you about things that are directly related to the job description. If someone asks you this, you might need a moment to think before you answer. Taking a moment to think of a clear, well-thought-out answer is often better than giving a quick answer that might not be right.
Example: “Companies that trade on the stock market set their prices by letting anyone buy equity shares at no cost. Through the offer document, a publicly traded company will find a balance between capital and public rights. Both public and rights component compromises are used to sell securities with different values.”
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