Ernst and Young Advisory and Blackrock Defined Contribution Analyst Questions | GFC Technical Interview Series

June 11, 2017

EY Transaction Advisory Services (SF) – Analyst

 

What’s the difference between GAAP and IFRS?

  • Different accounting standards

  • GAAP in US, IFRS elsewhere

What is a recent news for GAAP and IFRS?

 

What might be a reason why a company has 30% (high) revenue growth? (e.g Revlon)

 

Walk me from Revenue to net income and then uFCF

 

Difference between revenue and uFCF?

 

What’s the current ratio and what does it mean?

 

Is a higher current ratio always better?

 

What’s the difference between purchasing an equipment, capital lease, and operating lease?

  • Purchasing – buy asset and then depreciate

  • Capital lease – looks like a purchase but you do not own the asset so there are interest payments

  • Operating – doesn’t show up on balance sheet

What is the efficient market hypothesis and what are the 3 forms?

  • Weak – stock price only considers historical information

  • Semi – stock price only consider all public information

  • Strong – all information

What is beta?

 

Where is beta used?

 

What is the discount rate?

 

What is the formula for CAPM?

 

If there are 2 companies with Beta of 0.5 and other one has beta of 2, what do those mean? Which investment is safer?

 

Why might a company be willing to pay a premium for another company?

 

San Francisco Blackrock - Defined Contribution Strategy Analyst (Superday)

 

Tell me about yourself.

 

Why Blackrock?

  • Employee and business side. Kaye and matt seemed to genuinely care about me and asked about my interests, rare in finance given their roles as D and MD.

  • Mentorship culture and thought leadership.

  • Business side – 4.1 trillion in assets, Aladin tracks 15 trillion assets (referred to economist article) – very mind-blowing

Why DC?

  • Solves social problem in an ethical way.

  • Too little saving in the US. Financial advisors recommend save 10-14% but not even close here.

  • Nice contrast to Asia where people are known to be thrifty and can see in banks reserve ratio of 50%

 

Can you tell me about a time when you worked as a team?

Can you tell me about your experience in technology and if you have relevant coding experience?

Tell me about a time you made a financial model and how it worked out?

Favorite class and why?

Mostly banking why do you want to do asset management now?

How would you value a company?

Long term goals?

 

San Francisco Blackrock - Defined Contribution Strategy Analyst (Superday 2)

 

How would you allocate an optimal portfolio?

  • Talked about efficient frontier and shift to ETFs.

  • Talked about ishares and making a portfolio of ETFs b/c in academic literature they should lie on the efficient frontier and that represents the highest level of returns for a given amount of risk

Are you a passive or active investor?

  • Passive, would rather go for passive tracking funds. Benefit of diversification, more than 20+ stocks then you are pretty diversified and will have diversified unique risk away.

What do you think the MSCI US ETF tracks/ what is this ETF’s portfolio composition on a high level?

  • Split by large cap, mid cap, small cap, then break down into different geographies, US, EIM, Canada etc.

Why are you interested in this role?

 

Some stress testing roles previously?

 

Which game of thrones character would you be?

 

If you could choose to work in any office in a sitcom where would that be?

 

Why Blackrock and defined contribution specifically?

 

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