A capital market is a place where debt instruments and equity instruments are bought and sold. If you want to work in the capital market, you should have basic knowledge about securities, guidelines of SEBI, current prices in market trends. If you have good financial management skills and knowledge then, there is a great scope for you. Here, let’s know some of the Capital Market Interview Questions.
By referring to the below questions you can prepare your responses in a better way. The interviewers ask tricky questions to test whether you can work in a capital market because the capital market is highly volatile. These questions will help you to understand the pattern of questions and answers.
Capital Market Interview Question
- Why are capital markets important?
Capita market is a channel where the investment and savings are done by the different companies in one place. The supply generally includes different financial institutions, individual investors, companies, government agents, business agents, and individuals who buy and sell securities at market price.
The different types of capital markets are the primary market which is called the first issue market where securities are issued for the first time. I am secondary is a market where securities are being sold in the primary market and then again brought in the secondary market. Other common markets are the stock market and bond market. Stock markets include selling and buying stocks. The bond market includes where Government and corporate bonds are bought and sold at a particular amount of interest rate.
- What Are The Components Of The Capital Market?
Answer: A capital market is a place where trading in capital markets requires a good amount of knowledge related to the market securities and trading. This is a direct question, that is asked to test your understanding of the capital market and its subject matter. It is divided into different parts based on the types of securities. These securities are part of debt instruments
The capital market comprises different types of markets. The primary market is the place where the securities are issued for the first time. That is new securities issued by the companies to the general public.
Secondary market: refers to the place second-hand securities are issued. Other components are the Debt market, Equity market, where Debentures and equity shares, and preference shares are bought and sold. There is another market called derivative market where futures, options, and swaps like international securities are traded
- What are the advantages of the capital market?
Answer: There are various advantages of capital market in the economy. It helps in the growth of the capital market leading to success.
Security of transactions: The capital market believes in conducting secured transactions between both parties so once the offer is made to the other party it will only be completed once it is accepted. So a contract is created between both parties which provide security of transactions.
Acceptance of offer: Once the party sentence for confirmation about the receipt of the security when the offer is considered accepted. This offer is valid for continuing the transactions.
- What are the disadvantages of the capital market?
Answer: The disadvantages of the capital market are that it requires specialized knowledge of trading. Due to high fluctuations in prices, there are more chances of getting losses in stocks and high-risk equities. So you should have the patience to deal with the customer queries and market trends.
Termination of offer: If the terms and conditions and the offer are not fulfilled then it will be terminated or rejected.
Due to which the capital market transactions are affected.
Once the offer is rejected it cannot be accepted during the next future transactions which may result in heavy losses.
Sample: I have the required knowledge of working in the capital market. I have good communication skills and deal with the offeror and offeree. The capital market has various advantages and disadvantages which may directly impact the transactions between both parties.
- What Are The Sebi Guidelines For The Issue Of Debt Instruments?
Answer: SEBI is a governing body of the capital it makes certain rules and regulations for protecting the interest of the investors. It has framed certain guidelines based on which all the debt instruments are traded.
SEBI guidelines for the issue of debt instruments are as follows:-
Issuance of the security should be done based on trust between both parties. The registration of different securities will be approved by the SEBI. If registration is not approved then securities will be canceled automatically. Debt instruments are required to be issued by the public on listed companies. These companies provide the benefit of fixed interest to the investors which is assigned by the issuer. An offer document is provided by the listed companies which include all the disclosures related to the relevant facts of the company.
- What are the challenges you faced during your previous task?
Answer: The interview’s main focus is to understand whether you have the required problem-solving skills. What are your strategies to handle difficult situations? How you face a challenge in your respective professional field. You can also discuss your prior experience in your previous job where you had gone through any major challenge. Help the interviewer to understand your analytical and problem-solving abilities.
I had the necessary qualification in the related field of finance marketing and investment. During the initial years, I found it challenging to understand the working of buying and selling of stocks and securities in the market. After having theoretical knowledge I started understanding its practical application. This helps me to know more about the stock market and its functioning. Now I am capable enough to predict the working of different stocks of the company.
- How to write to remain motivated during office hours in the capital market?
Answer: The interviewer wants to know whether you can work efficiently, even if you are unmotivated during work time. So this question you can discuss your past experiences, your strategies of working task management and planning. Also, describe what inspires you to work efficiently and do better every day.
Sample: I try to see the challenges as the stepping stone for success. I have the motivation that comes from my mindset, that helps me to understand that challenges can be taken positively in our life. I have a belief that if you want to grow, then you have to come out of your comfort zone. By being competent and consistent, you can reach higher positions in your career.
- What duties are required to be performed in the capital market?
Answer: while asking this question the main focus of the internet is to know whether you have any information about the capital market. You know about the roles to be performed in the capital market and the responsibilities associated with it. What responsibilities and duties are performed during buying and selling of the securities.
Sample: I can provide sound advice on different investments and portfolio-related queries. I can work in collaboration with my seniors and communicate well with the customers related to different queries. I have experience working in the capital markets.
- What traits are required to become successful in the capital market?
Answer: To become successful in a capital market you should have the required qualifications. You can mention the skill and qualities required for proper analysis and forecasting of the tradings in the capital market. The capital market is highly dynamic. The prices go up and down daily due to which the buyer and seller should have close supervision on it.
Sample: I believe that to work in a capital market a person should have more skills than qualifications. You need to understand the finance and working of the stock market and other derivative securities. They should also have excellent communication and negotiation skills. Also, I have prior experience in working in the capital market so I can take the risk of investing in larger companies.
- What are your strategies for this job?
Answer: The mindset of the interview was to test whether you have the knowledge about your field or not so believe in your mindset and try to speak about it to show your hidden talent to the interviewer. Different strategies are required to remain updated with the guidelines of the SEBI and to know how the capital market works. By considering all the aspects related to the capital market you can gain a good amount of knowledge about the sector.
Sample: I believe that the capital market requires high efficiency as it is a volatile market. Every day things keep on changing, it’s like a roller coaster ride. So we should be mentally prepared to handle the difficult situations related to profit and loss. I have the required patients to calmly observe and analyze different events taking place in the market. Due to my prior experience, I can make some financial predictions related to different types of securities.
Conclusion: From the above article you must have got some basic information about the capital market and its functioning. The capital market has a large scope. You can earn a good income if you have a piece of good knowledge about it.