Equity Research interview questions
Q 1. What Key factors/Ratio should be looked at while carrying out Fundamental analysis?
ANS. Usually following factors are looked at :
- Price Earnings Ratio (PE),
- Earnings Per Share (EPS),
- Dividend Payout Ratio (DPS),
- Return On Equity (ROE)
- Profit Margin Ratio
Q 2. In fundamental analysis while analyzing a company ,what factors should be considered ?
The various factors of a company which need to be studied includes,
- The Management or the administration of the company.
- The Annual Report of the company.
- Financial Statement Analysis of the company.
- Financial Ratios calculation from the same.
Q 3. Can you through some light on Technical Analysis trends?
Technical Analysis Trends:
In our day to day life what do we mean by trend? It simply means the way of moving of particular situation or thing. In Technical Analysis also, a trend means the same that is the direction in which a security or market is moving.
- Bullish Trend – Bullish Trend means moving of stock continuously in upward direction. Bullish Trend means the overall rise in broad market indices.
- Bearish Trend – Bearish Trend means moving of stock continuously in downward direction. Bearish Trend in simple language means the fall in market indices. Investors considers bearish trend as a pessimistic scenario and go short on that particular stock.
- Range Bound/ Flat Trend – Range Bound/ Flat Trend means stock is neither making movement in upward direction nor in downward direction. Means it is playing in the similar range.
Q 4. Can you please explain Support and Resistance concept in technical analysis ?
Support and resistance are the levels which show the movement of stock.
Support is a price level that a stock tried to cross below, but ultimately stayed above. Support is level which has the lowest closing price value of five consecutive trading sessions.
Resistance describes a price level that the stock tried to cross above, but could not. Resistance is the level which has achieved high price value of five consecutive trading sessions.
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