Finance

Question 1

Working capital

Answer 1

Diff bw current assets and liabilities.

Question 2

Budgeting, forecasting

Answer 2

Financial plan, estimating future financial outcomes

Question 3

Financial statements

Answer 3

Profit loss statement, cash flow statement, balance sheet etc prepared at the end of the financial year to understand the info about the company’s financial position and performance

Question 4

EBITDA

Answer 4

Earnings before interest, tax, depreciation, and amortization

Question 5

Amortization

Answer 5

Reduction in value of intangible assets (eg reduction in value of a patent or copyright)

Question 6

Accrual accounting

Answer 6

Records expenses and revenue when they are earned or incurred, not when cash exchange happens

Question 7

Cash flow statement

Answer 7

Shows how cash moves in and out of a company. Imp for understanding liquidity and managing operations

Question 8

Gross profit

Answer 8

Revenue - cost

Question 9

Net profit

Answer 9

Revenue - cost - interest - expenses - taxes

Question 10

Debt vs equity

Answer 10

Debt - money taken from outsiders who aren’t a part of the organisation, like loans from banks, debentures, credit card loans, etc. Given preference in case of liquidation. Creditors don’t have voting rights. Paid fixed interest

Equity - money raised from people who are owners of the organisation. Gives ownership to investors. Called shareholders of company. Have voting rights. Last preference when liquidation. High risk high return.

Question 11

Profit Loss statement vs balance sheet

Answer 11

PL - Over a year ..
BS - statement of assets and liabilities on a particular date

Question 12

How would you invest 1 lakh

Answer 12

Diversified portfolio

Take some risks cuz I’m young, have high risk tolerance.

60% in shares - mutual funds (considering expense ratio - how much is charged every year) because it gives good returns.

10% Invest in gold ETF because it is a hedge against inflation
10% in silver ETF because I feel the value will increase due to its broad usage eg solar panel, battery, cars

10% in cryptocurrency, split among bitcoin and Ethereum - in case its value increases. It’s high risk high reward

5% in fang plus in US ETF - invests in top US companies - apple, microsoft, tesla, etc .. cuz high growth rate, can see stock price increasing.

5% in FD - security

Question 13

Indian budget 2025.

Answer 13

• A complete tax rebate on income upto 12,75,00 for salaried invids and 12 lakhs for non-salaried indivs

• 11.21 lakh crores for infra

• fiscal deficit ka target of 4.4% of GDP (fiscal deficit - how much govt spends minus govt revenue)

• day care cancer centre for all districts within 3 yrs

Question 14

Shares/ stock market

OTC

Answer 14

Stock market - platform where you can buy or sell shares of a company (eg. BSE, NSE)

Over the counter market -buying/selling stocks directly from another investor usually thru computer networks or buy phone

Question 15

Nifty

Answer 15

National fifty. Top 50 companies traded on national stock exchange. NSE in new delhi.

Question 16

Sensex

Answer 16

Sensitive index. Top 30 companies traded on Bombay stock exchange.

Question 17

Mutual fund

Answer 17

Financial instrument that pools money from investors and invests it in stocks or bonds. Investors don’t directly own the company’s stocks but they share profit or loss equally with other investors of the pool

Question 18

Repo and reverse repo rates

Answer 18

Repo rate (repurchase rate) currently 5.5% - rate of interest charged by central bank when giving loans to commercial banks. When increased, commercial banks will increase interest on loans, so ppl will take less loans, thus decreasing money supply w public. Ppl spend less. So demand falls. So prices falls. Thus reducing inflation.

Reverse repo rate (3.35%) - rate of interest received by commercial bank from central bank when they make deposits. When increased, commercial banks deposit more money w Central Bank, thus reducing money supply w public and controlling inflation.

Uses

Control inflation, simulate economic growth

Question 19

SEBI

Answer 19

Securities and exchange board of India

Regulates stock market and protects investors. Prevents fraud and insider trading

Question 20

RBI

Answer 20

REserve Bank of India

Controls money supply, interest rates, and supervised banks

Question 21

IRDAI

Answer 21

Insurance regulatory and development authority of India

Regulates insurance companies and politics

Question 22

PFRDA

Answer 22

Pension fund regulatory and development authority

Regulates pension schemes like NATIONAL PENSION SYSTEM (NPS). - retirement savings scheme

Question 23

NABARD

Answer 23

National Bank for agriculture and rural development

Provides credit and development support to agriculture and rural areas

Question 24

TRAI

Answer 24

Telecom regulatory authority of India

Regulates telecom services, prices, and competition

(Telecommunication - transmission of info over a distance using electronic means like satellites or radio waves)

Question 25

CBFC

Answer 25

Central board of film certification Certified films for public viewing. Balances freedom of expression w social responsibility.

Question 26

FSSAI

Answer 26

Food safety and standards authority of India Regulates food safety and quality standards

Question 27

AMFI

Answer 27

Association of mutual funds in India Sets ethical and operational standards for mutual funds. Protects investors. It is under SEBI

Question 28

NASSCOM

Answer 28

National association of software and service companies Represents India's IT and tech industry

Question 29

Stocks vs bonds

Answer 29

Stocks - own a part of the company Bonds - give a loan to a company (corporate bond) or city/state (municipal bond) or bank (certificate of deposit). Get a fixed rate of interest on it. Lower returns compared to stocks but lower risk too. Some risk - DEFAULT ie borrower is unable to pay u back

Question 30

SIP

Answer 30

Small, regular investments, lowers risk

Question 31

Inflation

Answer 31

Rise in prices leading to a fall in purchasing power

Question 32

GDP

Answer 32

Gross domestic product Total monetary value of goods and services produced in a country in a period of time. It a key measure of economic health and performance. India 4.19 trillion dollars

Question 33

IPO

Answer 33

Initial public offering First time a pvt company offers shares to the public

Question 34

GDP formula

Answer 34

Consumption + investment + govt spending + (export - import) Consumption - spending by households on Goods and services Investment - biz spending on capital, equipment, etc Govt spending on goods and services eg salaries OTHER METHOD - income approach - sum of all income generated thru wages, rent, interest, profit, etc

Question 35

Cryptocurrency

Answer 35

Digital money secured thru cryptography (way of hiding info to keep it safe) and exchanged thru computer networks. Not regulated by institutions Bitcoin by SATOSHI NAKAMOTO to buy and sell just like actual money. But it's now seen more as a way of investment cuz they expect its value to rise. Cryptocurrency is very volatile. Works thru BLOCKCHAIN - unchangeable ledger that records transactions across multiple computers so it's a secure way of tracking them. Data is added in a block and is linked to the previous one. Very volatile, nobody rlly knows what their value should be, can be an environmental concern cuz that much computing requires a lot of electricity (altho banks may use more, plus that energy could come from renewable sources eventually).

Question 36

Gdp

Answer 36

4-4.5 trillion dollars