About the Module

The finance module has been designed to check general financial knowledge and its application for a graduate in all subject areas that affect a financial manager’s decisions. The module has been designed to assess a fresh graduate without any industry experience. The focus is to test understanding beyond the theoretical aspects taught in graduate studies. The module assesses the students understanding of how financial instruments behave in real life scenarios and impact of externalities on their value, practical understanding of taxation, macroeconomics, etc. It does not involve any complicated calculations.

Since the questions combine theoretical knowledge with pragmatic behaviour, only a person who has a natural keenness in these areas would be likely to excel more.

Investments

In finance, investment is the commitment of funds through collateralized lending, or making a deposit into a secured institution. Investments are often made indirectly through intermediaries, such as banks, credit unions, brokers, lenders and insurance companies. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary. In the module, the candidate is assessed on basics of the equity market including stock valuation based on multiples and CAPM. Knowledge of bond markets is checked through questions on bond valuation. Candidate's working knowledge of Options and Derivatives is gauged through an understanding of what these products mean.

Banking Products

Most common deposit products being Savings Bank, Current Account, Term deposit Account and lending products being Cash Credit and Term Loans. Suitability for the banking industry is assessed through questions testing familiarity with various banking products vis-à-vis CASA, FDs, Loans/Debts, Trade Services and Credit Cards.

Macro Economics

Macroeconomics encompasses a variety of concepts and variables. Macroeconomic theories usually relate the phenomena of output, unemployment, and inflation. Outside of macroeconomic theory, these topics are also extremely important to all economic agents including workers, consumers, and producers. Financial sector is closely linked with the macro-economic environment and factors such as inflation, interest rates etc. Thus, a candidate needs to have knowledge of various macro-economic variables and their implications on various investment options and banking products pricing.

Taxation

This section evaluates Candidate’s knowledge of tax on income from multiple sources like dividends, interest amount etc and the effect of various scenarios on tax payable. Knowledge of tax rebates offered under different investment schemes is also tested

Tips to Improve:

1. You should refer to basic books on banking and the financial sector to understand the meaning of the financial terms, services, market types, etc.
2. Follow business magazines and newspapers closely and analyze each change from the view point of its impact on the industry. Read about the latest trends related to loans, NPAs, banking sector and financial services.
3. Continue reading, talking to industry people and observing the functions of a bank and you would be able to keep abreast with the industry norms and maintain your edge.
4. For Banking, http://www.nios.ac.in/srsec319/319-33.pdf gives a good introductory overview of the various functions of a bank. You can start from this and then build basis your knowledge in each of these functions.
5. Continue to practise questions from books like Quantitative Methods for Banking & Finance, and Accounting and Finance for Bankers in order to maintain your advantage.