Most common Interview questions and Answers for Freshers or Experience Person Related Finance, Fund, and Investment

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If your interview has been scheduled and you don't know or don't understand what questions they are going to ask, then this article is for you.

In this, I have given the most common questions related to finance, fund, and investment With their effective answers. I have made a Simple and effective Answer which is easy to understand for you and easy to Explain. These questions are asked in almost all interviews. 

So read this completely so that you can understand better

1. what is finance-                        

Finance is the process of raising funds or capital for any kind of expenditure. It is the process of channeling various funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use. 

Finance is categorized into 3 categories: personal finance, public finance, and corporate finance.

2. what is working capital in simple words

In short, working capital is the money available to meet your current, short-term Goals. To make sure your working capital works for you, you'll need to calculate your current levels, project your future needs and consider ways to make sure you always have enough cash.

Example - For instance, if a company has current assets of $100,000 and current liabilities of $80,000, then its working capital would be $20,000.

3. long term and short-term finance

Long-term financing options are issuing equity, debentures, bonds, venture funding, etc. Short-term Finance options are bank overdrafts, short-term loans, lines of credit, etc. Short-term financing arises with an attempt to finance current assets.

4. What do you know about funds

A fund is a pool of money set aside for a specific purpose. The pool of money in a fund is often invested and professionally managed in order to generate returns for its investors. Some common types of funds include pension funds, insurance funds, foundations, and endowments.

5. What is IRR and what formula ( Internal rate of return )

What is IRR - The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis

>

	=	Net Present Value
	=	total number of periods
	=	non-negative integer
	=	cash flow
	=	internal rate of return

6. what is a mutual fund-

Mutual Fund is like a trust which is collects money from a number of investors and invests the same in equities, bonds, money market instruments, or other securities.

A mutual fund is Managed by a professional Fund Manager.

7. Types of Mutual Fund

There are 3 Important Types of Mutual Fund They are :

I . Equity funds - equity funds are a kind of mutual funds that predominantly invest in the stocks of different companies.  Since these funds invest in the equity market, they tend to carry high amounts of investment risk.

II. Fixed-income funds - Also known as bond funds fixed income funds invest a major portion of the investors’ money into bonds issued by corporations and the government.

III . Money market fund - This Fund has relatively low risks. By law, they can invest only in certain high-quality, short-term investments issued by U.S. corporations, and federal, state, and local governments.

8. What is SIP full form?

A Systematic Investment Plan (SIP), more popularly known as SIP, is a facility offered by mutual funds to investors to invest in a disciplined manner. SIP facility allows an investor to invest a fixed amount of money at pre-defined intervals in the selected mutual fund scheme.

9. What is Fund Manager -

A fund manager is responsible for implementing a fund's investing strategy and managing its portfolio trading activities. The fund can be managed by one person, by two people as co-managers, or by a team of three or more people.

10. Capital Market 

A capital market is a place where buyers and sellers engage in the trade of financial securities like bonds, stocks, etc. The trading is undertaken by participants such as individuals and institutions.

11. What is stock 

  

A stock is a general term used to describe the ownership certificates of any company. A share, on the other hand, refers to the stock certificate of a particular company. Holding a particular company's share makes you a shareholder.

There are more questions related to Stocks, Bonds, Shares and Investments which are ready with their effective answers, if you need please comment below so that I can create a new blog on that.

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Here I have given 4 simple answers to common questions related to yourself.

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