Questions on financial markets and instruments –
1. Difference between capital market and money market
2. Difference between primary and secondary market
3. Give some examples of securities trading in capital market and money market
4. What is an equity share?
5. Difference between class A and class b equity share
6. What are bonds and debentures – what are the types?
7. What are preference shares and their types?
8. What is certificate of deposit?
9. What is a treasury bill?
10. What are commercial papers?
11. What is a mutual fund?
12. Types of mutual funds – open ended vs closed ended?
13. What are the strategies of mutual funds – equity, debt, hybrid
14. What is a fund fact sheet?
15. What is an offer document?
16. What is Key information memorandum?
17. How is a mutual fund structured or set up?
18. What is the 3-tier system in mutual fund?
19. What is the difference between the mutual fund and AMC?
20. What is NAV and how is it calculated?
21. What is SIP, SWP, STP?
22. What is a load in mutual funds?
23. How are returns taxed in mutual funds
24. What is sharpe ratio?
25. What is a direct plan in a mutual fund?
26. Difference between hedge fund and mutual fund
27. How is large cap, mid cap and small cap categorization determined in India?
28. How will you compare 2 mutual funds to determine which one is better?
29. What are annuity plans?
30. What are structured products – give some examples
31. What are MBS, ABS, CDS, CDO, CMO
32. What is the role of a depository?
33. Difference between a custodian and a depository
34. Difference between depository and depository participant
35. Who is the RTA and roles of the RTA?
36. Who all are the regulators of the financial markets in India, US, UK.
37. What is an ADR and GDR?
38. Difference between a broker, dealer, prime broker, discount broker, block broker, primary dealer, market
maker.
39. Who is an underwriter
40. Who is a merchant banker and what are the services provided by a merchant banker?
41. How is IPO allotted
42. What is Grey market Premium
43. What is a private placement?
44. What are treasury bills, treasury notes and treasury bonds?
45. Who is an issuing and paying agent?
46. What is the role of a credit rating agency – name some agencies in India and the globe
47. What is book building?
48. What are roadshows
49. Difference between DRHP and RHP
50. What is an offer for sale?
51. What are corporate actions – dividend, bonus shares, split, reverse split, rights issue, buy back, spin off, split
off, mergers and acquisitions – know the accounting and market price impact of each
52. What is total risk, systematic risk and unsystematic risk
53. What is a repo in the debt market?
54. What are derivatives and types of derivatives – futures, forwards, options, swaps, exotics
55. What is mark to market
56. What are the various types of margins required derivatives – initial margin, maintenance margin and
variation margin – what are the types of margins in India
57. What is call option and put option?
58. Difference between options and futures?
59. What is contango and backwardation?
60. Explain – currency swap, interest rate swap, total return swap, equity swap, commodity swap, credit default
swap
61. What is dividend yield?
62. What is convenience yield?
63. Explain ITM, OTM and ATM options
64. What are greeks in options – delta, gamma, theta, vega, rho and how do they impact the option prices
65. 3 methods of option valuation – BSM, Binomial model, Monte carlo simulation
66. Option strategies – straddle, strangle, box spread, butterfly, covered call, protective put, calendar spread,
iron condor, etc.
67. Difference between American and European options
68. What is put call parity
69. What are chooser options – read about exotic options such as binary, lookback, Bermuda, compound, basket
options, etc.
70. what is duration and convexity in bonds?
71. What is price yield convergence in bonds
72. What is YTM, YTC, YTD, YTW, Current Yield
73. What is clean price, dirty price and accrued interest
74. What are the conventions used to calculate accrued interest?
75. What are spot rates?
76. When does a bond trade at a premium, par, discount?
77. What is an SPV?
78. What is a nostro account and Vostro account
79. What is a non-deliverable forward
80. What are cross currency rates
81. What is interest rate parity and how does it impact the currency market
82. What is the sovereign gold bond in India and how does it work?
83. Difference between hedge fund and pvt equity
84. What are the various strategies of a hedge fund
85. What is carried interest
86. Explain the types of waterfall distribution in hedge fund
87. What is HWM – high water mark
88. Different stages of VC funding
89. Difference between management buy out and buy in
90. What is an LBO and when can it be used
91. What is distressed investing
92. What is ESG investing
93. What are REITs – which are the REITs trading in India
94. Who is the LP and who is the GP?
95. Committed capital vs drawn down capital vs dry powder
96. What is a hurdle rate – hard vs soft hurdle rate
97. What is the catch up clause – whom does it benefit?
98. What is a clawback provision
99. What is a fund of fund?
100. Difference between growth and value stocks
101. What is a ninja loan?
102. Which is the best investment type/sectors in each scenarios – interest rates are going to increase, inflation is
expected to be high, economic growth will be slow, domestic currency is expected to appreciate, domestic
currency is expected to depreciate, economic growth is high, economy is recovering from a trough, economy is
declining
103. What are zero coupon bonds
104. What are STRIPS in bonds
105. What are TIPS bonds
106. When does a bond become callable, when does it become putable?
107. What is SLB – security lending borrowing
108. What are the services provided by an Investment Bank?
109. What is LIBOR and SOFR?
110. How are the following returns taxed in india – equity dividends, bonus shares, bond interest, capital gains on
all securities, buyback, accrued interest in ZCB, etc.
