Saturday, December 31, 2011

INTERVIEW QUESTIONS FOR FINANCE STUDENTS


1.Why one rupee note is signed by the ministry of finance? Is governer has the right to sign this note? Is there any interference by the RBI?

As ruppee is the currency of our country and only govt has the authority to issue indian currency it has been signed by ministry of finance, all other notes are bearer notes which are signed by governor.
No interference by RBI.
Nominal money relates more to it's measure of counting - so nominal figure of what is written on bill, while "real" relates more to it's purchasing power (usually between some periods of time). For instance 100 units in nominal could buy 2 units of good in 1950 and 1 unit of good in 2005, at the same time real value of this 100 nominal units are 100 real units in 1950 and 50 real units in 2005.
Same is with GDP. In nominal it can rise due to inflation while it can stay the same or even decrease in real value.

3.What is Crossover Rate?

When comparing two different but similar projects, the specific returns required for the projects to have the same net present value. Because two similar securities may have different volatility, calculating the crossover rate helps to determine which will be more profitable in the short and long terms. For example, one dotcom company may achieve a steady rate of growth, but only slowly over time, while a second dotcom may achieve the same returns in a shorter timeframe, but with greater vulnerability to market downturns. Calculating the rate at which each will achieve a desired net present value, assuming no massive changes in circumstances, may help an investor make decisions regarding which to buy and which to sell.

4.What is Beta?

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.It is the sensitivity of the asset with regards to its market.Say, if it is 2..that means if market go up by 5%, that asset will go up by 10%, it can even be negative, which is known as negative corelated,where asset will perform inverse to that of market.
The answer to this is not zero! The hour hand, remember, moves as well. The hour hand moves a quarter of the way between three and four, so it moves a quarter of a twelfth (1/48) of 360 degrees. So the answer is seven and a half degrees, to be exact.