Big companies provide complex training to all new hires and analysts in the team. They teach them what expense models they should use, how to create reports and how to do other duties assigned. However, recruiters still prefer to hire candidates who can talk about their job and have good understanding of the common terminology.
So, can you explain financial models?
Financial modelling is an exercise in either asset pricing or corporate finance, an exercise of quantitative nature. Saying it differently, it is about translating a set of hypotheses about the behavior of markets or agents into numerical predictions. To show you an example, based on the hypotheses that dollar will grow constantly the next year, a rise of the trade deficit will be 5%.
As you can see, you should not only tell what it is, you should also give a practical example. Doing it, interviewers see that you do not only read books and repeat definitions, but also understand what does it mean for you and for their business.
Do not forget that job interview is not a school exam. . . . They want you to do more, to show more, and to understand the real meaning of the definitions.
At the end of the day, you should not forget that technical questions are what they are–simply technical. They will expect and exact answer from you. If they ask about ROI, you should say return on investment. Nothing more, nothing less. Creativeness is not needed for a good answer to technical question.
What to say at the end?
Congratulations! You came to the last answer. You did more than 80% of all job seekers do before their interview. But if you would like to really stand out, if you would like to read brilliant answers to all twenty tough financial analyst interview questions, practical case studies, and winning interview strategies, you will find them in the Financial Analyst Interview Guide.
Jeremy Hopkins, Your Personal Interview Coach