Financial Analyst – Exam questions

Flashcard 1

Q: What are the four basic market structures?
A: Perfect competition, monopolistic competition, oligopoly, and monopoly.

Flashcard 2

Q: How do currency regimes impact investment decisions?
A: Fixed regimes offer stability; floating regimes add exchange rate risk but allow monetary flexibility.

Flashcard 3

Q: What are the tools of strategic enterprise analysis?
A: SWOT, PESTEL, Porter's Five Forces, and BCG Matrix.

Flashcard 4

Q: What are the types and roles of accounting in financial management?
A: Financial, managerial, cost, and tax accounting—used for reporting, decision-making, costing, and compliance.

Flashcard 5

Q: What is the role, content, and who are the users of financial statements?
A: Provide financial info to investors, creditors, and regulators; includes balance sheet, income statement, and cash flow statement.

Flashcard 6

Q: What is the role of ESG and non-financial reporting in economic analysis?
A: Assesses long-term risks, improves transparency, and influences investor decisions.

Flashcard 7

Q: What is the role of internal and external audit?
A: Internal: improve operations. External: verify financial statements. Procedures: risk assessment, sampling, testing.

Flashcard 8

Q: Why are accounting standards important for financial markets?
A: Ensure comparability, reliability, and transparency; enable global investment and reduce asymmetry.

Flashcard 9

Q: What are the objectives and methods of financial statement analysis?
A: Evaluate profitability, liquidity, and solvency using ratios, trend, and common-size analysis.

Flashcard 10

Q: What are the types and roles of taxes and tax systems?
A: Direct/indirect taxes; fund public services, influence behavior; should be fair, simple, and transparent.

Flashcard 11

Q: What are the stages of the annual state budget cycle?
A: Preparation, approval, execution, and auditing.

Flashcard 12

Q: How are financial markets classified?
A: Primary vs. secondary, money vs. capital, organized vs. OTC, domestic vs. international.

Flashcard 13

Q: What is technical analysis and its main tools?
A: Forecasts prices using past data; tools include moving averages, RSI, MACD, Bollinger Bands.

Flashcard 14

Q: What is market efficiency and its impact on investments?
A: In efficient markets, prices reflect all info—making active strategies less effective.

Flashcard 15

Q: What are the objectives and tools of portfolio analysis?
A: Maximize return for a given risk using MPT, CAPM, efficient frontier, Sharpe ratio.

Flashcard 16

Q: What are the main asset classes and their investment traits?
A: Equities, bonds, cash, real estate, and alternatives—vary by risk, return, and liquidity.

Flashcard 17

Q: What are equity valuation methods and their pros/cons?
A: DCF (accurate but assumption-heavy), comparables (easy but shallow), dividend models (only for stable firms).

Flashcard 18

Q: How is risk classified?
A: Systematic vs. unsystematic; credit, liquidity, operational; quantitative vs. qualitative.

Flashcard 19

Q: What are basic corporate risk management tools?
A: Hedging, diversification, insurance, controls, and scenario analysis.

Flashcard 20

Q: What is corporate governance and what are its mechanisms?
A: Ensures accountability via board oversight, audits, compensation, and shareholder rights.

Flashcard 21

Q: What are different models of corporate governance?
A: Anglo-American (shareholder focus), Continental (stakeholder), Japanese (cross-holding, long-term ties).

Flashcard 22

Q: How does capital structure affect firm value?
A: Debt provides tax shields but increases financial risk—optimal mix maximizes value.

Flashcard 23

Q: What is leverage in financial management?
A: Use of fixed costs or debt to amplify returns; increases both risk and potential reward.

Flashcard 24

Q: What is liquidity management and its tools?
A: Ensures firm can meet obligations. Tools: cash budgeting, credit lines, working capital, liquidity ratios.

Flashcard 25

Q: What are derivatives and their uses?
A: Financial instruments tied to other assets. Types: futures, options, swaps. Used for hedging, speculation.

Flashcard 26

Q: What are the tools of capital budgeting?
A: NPV, IRR, payback period, and profitability index—used to assess investment projects.

Flashcard 27

Q: What is the purpose of corporate communication and its tools?
A: Builds transparency and trust. Tools: reports, press releases, investor meetings, CSR reports.

Flashcard 28

Q: What are the components of interest rates and their effects?
A: Real rate + inflation + risk premium. Affect borrowing, investment, and valuation.

Flashcard 29

Q: How does economic policy impact investment strategies?
A: Fiscal/monetary policies influence rates, growth, and investor sentiment.

Flashcard 30

Q: What is the role of ethics and professional standards in finance?
A: Promote trust, reduce risk, ensure fair practices—key to stable markets.