Preview Questions Financial Analyst | Role Specific Skill

Question 1: What is the primary focus of tactical asset allocation in investment planning?

Which action should you take?

Choose only one option

Ensuring portfolio diversification

Maintaining stable returns

Capturing short-term opportunities

Reducing exposure to market risks

Question 2: When forecasting a bank's regulatory capital ratios, which approach is most suitable for considering dynamic balance sheet adjustments, stress scenario assumptions, and interplay between credit growth and risk-weighted asset inflation?

Which action should you take?

Choose only one option

AR(1) process on capital ratios without scenario integration

Integrated balance sheet simulation model linking asset growth, RWA density changes, stress scenarios, and management actions

Simple linear projection of risk-weighted assets based on current ratios

Static stress test based on a single economic downturn

Question 3: What is the primary purpose of value-at-risk (VaR) analysis in risk assessment for financial institutions?

Which action should you take?

Choose only one option

To measure potential loss under normal market conditions

To calculate portfolio beta

To estimate potential portfolio returns

To predict future market trends

Question 4: What financial ratio is most critical for assessing the ability of an investment to generate sustainable cash flow over time?

Which action should you take?

Choose only one option

The debt-to-equity ratio

The interest coverage ratio

The free cash flow yield

The price-to-earnings ratio (P/E)

Question 5: How would you allocate resources in the budget for a bank's risk management department?

Which action should you take?

Choose only one option

I prioritize risk management only when the bank faces immediate regulatory issues

I allocate resources based on an analysis of risk exposure, regulatory requirements, and historical risk data

I allocate resources based solely on historical spending

I allocate resources evenly across departments without considering risk exposure

Question 6: When reviewing the balance sheet of a financial institution, which metric provides the best indication of its leverage?

Which action should you take?

Choose only one option

Working capital

Quick ratio

Debt-to-equity ratio

Return on assets