- Describe four key differences between debt and equity.
- What is leverage?
- Why might a bond sell at a discount to par?
- What’s the difference between the clean price and the dirty price of a bond?
- What is credit risk?
Top 20 Capital Market Interview Questions and Answers for 2022
What is net present value?
This is one of the most commonly asked questions in capital market interviews, as it can be a good way for the interviewer to test your financial knowledge. When answering this question, it can be helpful to memorize a textbook definition of the term but reword it so that your response seems more thoughtful.
Example: “Net present value or NPV is a financial term that addresses the cash flow of a company. Its a value that represents the difference between how much cash is flowing into a company and how much cash is flowing out. Identifying this value is a good way for investors to learn about a companys operations before deciding to work with them.”
Experience and background questions
Questions about your experience and background are a way for the interviewer to learn more about your work history. The interviewer likely reviewed your resume before offering you an interview, but they may still want to ask some questions they have about your qualifications. Here are some questions you may encounter about your experience and background:
In-depth questions
In-depth questions are an opportunity for the interviewer to examine how well you understand the industry. They are also an opportunity for you to showcase your knowledge by preparing to answer any challenging questions that you might face in the interview room. When answering in-depth questions, it can be important to make sure your answers are thorough but also brief. If you encounter a question you arent prepared for, it is usually better to admit that you arent sure than to make up an answer that could be incorrect. Here are some examples of commonly asked in-depth questions:
Table of Contents
A capital market is a financial market in which long-term debt or equity-backed securities are traded. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. It is a market for securities where companies and governments can raise long-term funds. It is a collection of markets where money is invested for long-term purposes. This blog on Capital Market Interview Questions covers the most critical questions you should look out for and expect during the interview process.
Capital markets interviews are conducted to assess a potential candidate’s ability to analyze and provide insights into the current state of the markets. The interviewers will be looking to gauge the candidate’s market knowledge, analytical skills, and ability to communicate their thoughts clearly and concisely.
What are your strengths?
Interviewers wish to see how honest you are about your capabilities and whether you are confident about yourself. Tactfully answer this question highlighting the strengths of your character as a professional. Like my biggest strength is that I am a dedicated professional for my role. Money isn’t the only driving factor that lures me towards a job. I am keen on joining as a capital market consultant because I am passionate about working in this sector. I am dedicated enough to direct my entire focus in learning and gaining new experience every moment and make myself better at the job each day.”
Check out how to answer “what are your strengths” here.
ECM:
What are the advantages and disadvantages of an IPO?
A company makes a $140 cash purchase of equipment on January 1. How does this impact the three statements this year and next year?
How would you explain the difference between the debt capital markets and leveraged finance teams in investment banking?
Tell me how would you value a company? Which tools are most effective in this area?
Tell me a company you would invest in and why.
A company with high P/E acquires a rival with low P/E. Is this accretive or dilutive?
When would you use a PEG multiple?
What two companies are you bullish on, and what two companies are you bearish on? Why?
FAQ
What do I need to know about debt capital markets?
What questions are asked in a capital market interview?
- What is net present value? …
- Which cost is higher: debt or equity? …
- What does WACC stand for? …
- What is monetary policy? …
- Can a company make public issue of equity shares if it’s not fully paid up on any of their partly paid shares?
What do you do in debt capital markets?
What is DCM and ECM?
