Preview Questions Financial Analyst | Role Specific Skill

Question 1: In a budgeting scenario for a bank, how would you project interest income from loans in an increasing interest rate environment?

Which action should you take?

Choose only one option

Increase loan income based on macroeconomic forecasts

Assume interest income will remain stable despite changes

Use historical data on loan income and adjust for expected rate changes

Use a flat interest income model

Question 2: In risk modeling, which of the following methods is best suited to estimate extreme market events?

Which action should you take?

Choose only one option

Conditional VaR (CVaR)

Historical simulation

Monte Carlo simulation

Value-at-risk (VaR)

Question 3: How would you approach setting a budget for a new loan product in a financial institution?

Which action should you take?

Choose only one option

Forecast based on historical data and market trends

Use a zero-based budgeting approach

Base it on industry-wide standards

Use a percentage of previous product budget

Question 4: When projecting future credit card charge-offs, which advanced modeling technique effectively accounts for macroeconomic stress scenarios, customer-level credit attributes, and potential structural breaks due to regulatory interventions?

Which action should you take?

Choose only one option

Simple fixed-percentage stress add-on to historical charge-offs

Linear regression on historical charge-off rates without controls

ARIMA with seasonal adjustments but no macro factors

Survival analysis model with borrower-level attributes and scenario-conditioned macro assumptions

Question 5: How would you manage capital expenditures in a bank's budget to ensure that strategic projects are properly funded?

Which action should you take?

Choose only one option

Use a rolling forecast to adjust capital budget needs

Prioritize projects with the highest ROI

Allocate a set percentage of revenue to capital expenditures

Use a zero-based budgeting method for capital projects

Question 6: When analyzing a bank's profitability, which of the following would be the most relevant measure of the bank's ability to generate profits from its equity capital?

Which action should you take?

Choose only one option

Return on assets

Return on investment

Return on equity

Net interest margin