Interview Questions Answers.ORG
Interviewer And Interviewee Guide
Interviews
Quizzes
Home
Quizzes
Interviews Financial Account Interviews:Associate Finance ExecutiveBilling CoordinatorBilling SpecialistBudget AnalystCash ClerkCashier AssistantCFOClaim ClerkCommercial Loan OfficerDeath Benefits ClerkFinance AnalystFinancial AdministratorFinancial ControllerFinancial PlannerFinancial SpecialistHedge Fund TraderIncome Tax ExpertInsurance AgentWestern Union
Copyright © 2018. All Rights Reserved
Hedge Fund Trader Interview Question:
Suppose If you could only be provided on piece of information (read: metric) about a company before making an investment-decision what would it be?
Submitted by: MuhammadThe answer to this question at my fund, and consequently any other fundamental L/S fund I am aware of is Return on Invested Capital [ROIC]. We will also accept Normalized Free Cash Flow Yield.
ROIC is the return a company earns on each dollar invested in the business. Therefore, obviously, the greater ROIC is the better. ROIC is used as a quantitative measure of competitive advantage and, as such, if you are going to make an investment decision based on a single factor it would serve you well to choose the business with the greatest competitive advantage.
I call these questions the "All risk - No Reward Questions" because, simply put, answering them well will not earn you an offer, but answering them poorly can very well get you dinged quickly. Therefore, it is important that you prepare judiciously for these types of questions, but do not expect even amazing answers to earn you an offer.
Submitted by: Muhammad
ROIC is the return a company earns on each dollar invested in the business. Therefore, obviously, the greater ROIC is the better. ROIC is used as a quantitative measure of competitive advantage and, as such, if you are going to make an investment decision based on a single factor it would serve you well to choose the business with the greatest competitive advantage.
I call these questions the "All risk - No Reward Questions" because, simply put, answering them well will not earn you an offer, but answering them poorly can very well get you dinged quickly. Therefore, it is important that you prepare judiciously for these types of questions, but do not expect even amazing answers to earn you an offer.
Submitted by: Muhammad
Copyright 2007-2024 by Interview Questions Answers .ORG All Rights Reserved.
https://InterviewQuestionsAnswers.ORG.
https://InterviewQuestionsAnswers.ORG.