Financial Analyst – Exam questions

What are the four basic market structures?

Perfect competition, monopolistic competition, oligopoly, and monopoly.

How do currency regimes impact investment decisions?

Fixed regimes offer stability; floating regimes add exchange rate risk but allow monetary flexibility.

What are the tools of strategic enterprise analysis?

SWOT, PESTEL, Porter's Five Forces, and BCG Matrix.

What are the types and roles of accounting in financial management?

Financial, managerial, cost, and tax accounting—used for reporting, decision-making, costing, and compliance.

What is the role, content, and who are the users of financial statements?

Provide financial info to investors, creditors, and regulators; includes balance sheet, income statement, and cash flow statement.

What is the role of ESG and non-financial reporting in economic analysis?

Assesses long-term risks, improves transparency, and influences investor decisions.

What is the role of internal and external audit?

Internal: improve operations. External: verify financial statements. Procedures: risk assessment, sampling, testing.

Why are accounting standards important for financial markets?

Ensure comparability, reliability, and transparency; enable global investment and reduce asymmetry.

What are the objectives and methods of financial statement analysis?

Evaluate profitability, liquidity, and solvency using ratios, trend, and common-size analysis.

What are the types and roles of taxes and tax systems?

Direct/indirect taxes; fund public services, influence behavior; should be fair, simple, and transparent.

What are the stages of the annual state budget cycle?

Preparation, approval, execution, and auditing.

How are financial markets classified?

Primary vs. secondary, money vs. capital, organized vs. OTC, domestic vs. international.

What is technical analysis and its main tools?

Forecasts prices using past data; tools include moving averages, RSI, MACD, Bollinger Bands.

What is market efficiency and its impact on investments?

In efficient markets, prices reflect all info—making active strategies less effective.

What are the objectives and tools of portfolio analysis?

Maximize return for a given risk using MPT, CAPM, efficient frontier, Sharpe ratio.

What are the main asset classes and their investment traits?

Equities, bonds, cash, real estate, and alternatives—vary by risk, return, and liquidity.

What are equity valuation methods and their pros/cons?

DCF (accurate but assumption-heavy), comparables (easy but shallow), dividend models (only for stable firms).

How is risk classified?

Systematic vs. unsystematic; credit, liquidity, operational; quantitative vs. qualitative.

What are basic corporate risk management tools?

Hedging, diversification, insurance, controls, and scenario analysis.

What is corporate governance and what are its mechanisms?

Ensures accountability via board oversight, audits, compensation, and shareholder rights.

What are different models of corporate governance?

Anglo-American (shareholder focus), Continental (stakeholder), Japanese (cross-holding, long-term ties).

How does capital structure affect firm value?

Debt provides tax shields but increases financial risk—optimal mix maximizes value.

What is leverage in financial management?

Use of fixed costs or debt to amplify returns; increases both risk and potential reward.

What is liquidity management and its tools?

Ensures firm can meet obligations. Tools: cash budgeting, credit lines, working capital, liquidity ratios.

What are derivatives and their uses?

Financial instruments tied to other assets. Types: futures, options, swaps. Used for hedging, speculation.

What are the tools of capital budgeting?

NPV, IRR, payback period, and profitability index—used to assess investment projects.

What is the purpose of corporate communication and its tools?

Builds transparency and trust. Tools: reports, press releases, investor meetings, CSR reports.

What are the components of interest rates and their effects?

Real rate + inflation + risk premium. Affect borrowing, investment, and valuation.

How does economic policy impact investment strategies?

Fiscal/monetary policies influence rates, growth, and investor sentiment.

What is the role of ethics and professional standards in finance?

Promote trust, reduce risk, ensure fair practices—key to stable markets.