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

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?