You will need to have a background in finance and strong mathematical skills to complete this exam. Many employees become incredibly nervous at the thought of this test. However, with the right skills and plenty of practice, there is no reason those in the financial sector cannot pass the exam and secure the job of their dreams.
What Is a Finance Aptitude Test?
A financial aptitude test is an exam used during the application process for most financial firms. Many banks and other financial companies incorporate the test into the early stages of their recruitment procedure. Meaning, the financial reasoning test will need to be completed before any formal interviews occur. Large companies generally receive an astronomical number of applications. They, therefore, need a way to differentiate the strong applicants from the rest. The test allows hiring managers to quickly eliminate candidates who are not suitable for the role. More time can be spent on the applicants who have strong chances of succeeding, therefore.
What Employers Use Financial Reasoning Tests?
It will come as no surprise to hear that employers in the finance sector use financial reasoning tests. This includes banks, investment companies and insurance firms. It is not only financial firms that use these tests, however. Any company or role where a strong understanding of mathematics is necessary may choose to adopt this exam as part of their application process. However, the financial reasoning test is not to be feared. It is not a way to deter applicants but to ensure that employees are placed into a suitable role for their skill set. Tests such as this emphasize exactly why applicants should always thoroughly read the job description. Ensuring that your skills and qualifications align with the role will make the application process much more straightforward.
How Is a Financial Reasoning Test Different From a Numerical Reasoning Test?
A financial reasoning test is very similar to a numerical reasoning test. The most significant difference is that more text generally accompanies the financial reasoning test. Numerical reasoning tests tend to be purely number related and are generally a series of mathematical equations for the applicant. Employers in the finance industry are also keen to test comprehension skills. They want to be confident that candidates can comprehend text and discard irrelevant information. They also want to assess candidates’ ability to understand text in tandem with solving mathematical problems. Additionally, the calculations tend to be more elaborate and in-depth on financial aptitude tests.
How Are Financial Reasoning Tests Scored?
The tests vary dramatically depending on which supplier is used. Most employers will be happy to inform you of their test provider beforehand. Obtaining this information will help you massively in the preparation stages. Luckily, most financial aptitude tests do not negatively mark. But, again, it is worth confirming this with the test provider in advance of the exam. The majority of tests will be multiple-choice, with one correct answer. However, there may be occasions where there is a second-best answer worth half the marks. The pass rate for the exam will generally sit at 80%. Nevertheless, employers could be forced to raise this should there be an exceptionally high caliber of applicants.
What to Expect on a Financial Reasoning Test – Finance Test Questions and Answers
Every company will use a slightly different financial reasoning test. Therefore, the exam will be tailored to the specific demands of that business. Still, the general format is usually very similar. Some of the questions will likely involve graphs and tables of data. You will be asked to extract information from the charts and complete a calculation based on this. Other questions will test your knowledge of financial terminology. For example: a) The entire value of the business b) The entire value of the business considering its capital structure c) The market value of the equity of the busines d) The book value of the equity of the business For example: 1 | 5 | 4 | 16 | 14 | 42 | ? a) 41 b) 5 c) 62 d) 39 In preparation for the exam, a range of practice questions should be completed. It is always best to focus on the weaker areas during the revision process.
What Does a Financial Reasoning Test Measure?
The primary reason for a financial reasoning test is to test your mathematical skills as a candidate. In addition, your potential new employer measures your ability to understand large quantities of information. The time constraints are often very intense, akin to the expected working style at many large financial firms. These employers also want to observe your capability to work independently. This is a crucial attribute of many who are successful in the financial sector. Those who can demonstrate strong independent working skills from the beginning are more likely to succeed in this industry.
How to Prepare for a Financial Reasoning Test
By gaining this information, you should be able to find example questions online to practice. Failing this, you will be able to find information surrounding the formatting and style of the examination. This will help you considerably heading into the test and can ease any nerves beforehand. Additionally, it highlights your proactiveness and enthusiasm for your potential new employers. These traits will help set you apart from your competition, should you be successful in gaining access to the next round of interviews.
Practice Under Time Constraints
The best way to prepare for any test or examination is under time constraints. While this is an added pressure for your revising process, it will help you tremendously with the actual test. There are lots of practice tests available online with enforced time limits which are immensely beneficial to your revision.
Revise Financial Terminology
Your knowledge of financial terminology will be tested heavily throughout this examination. You should spend time revising and researching, as well as practicing your mathematics. Remember to revisit common terms such as ‘bonds’ and ’equity’ as well as company specific terminology.
Key Tips for Taking a Finance Test
Therefore, there will likely be tricky time constraints on your financial aptitude test. The best technique is to work out exactly how much time you can allocate to each question. For example, there may be 10 questions involved in a one-hour exam. Therefore, you know from the start that you can allocate six minutes to each problem. The primary purpose of a financial aptitude test is to rate your ability to comprehend mathematical information and complete calculations. However, these jobs often include a high level of responsibility. Therefore, employers are keen to test your attention to detail. Curveballs are often incorporated into the questions. These might seem irrelevant at first, but can often be a significant stepping stone towards the correct answer. Therefore, always make sure you take the time to read each question thoroughly before attempting to provide the solution. It is unlikely that you will be negatively marked during a financial reasoning test. Giving your best guess will always be better than leaving the space blank. First, you should be well rested. This means aiming for a solid eight hours of sleep the night before. If your test is early morning, ensure you wake in ample time to avoid rushing. A healthy breakfast is essential to avoid any hunger cues distracting you during the exam. Finally, to ensure that your brain works at its optimum, you must be hydrated. Usually, smaller firms will offer more flexibility in response to the exam result you achieve. These companies are likely to view each application individually. They will weigh up your results alongside your supporting documents and if you have performed exceptionally well in other areas, they may be willing to proceed to a formal interview. This then allows candidates to prove themselves, showcasing the capabilities they have for the role. Unfortunately, larger firms often receive hundreds, if not thousands of applications. Therefore, they use the financial aptitude test as a way to filter the candidates. Those who do not pass the test are unlikely to proceed to the next round of interviews. Individuals facing rejection should try to view it in the most positive way possible. The results will showcase the weaknesses in your understanding, giving you a direct revision plan to help you study before reapplying for other financial positions. Hopefully, the rejection can be transformed into encouragement to continue pursuing your chosen career path. Others pass the information onto the employer, who will be in touch in due course. However, upon passing the financial aptitude test, you will likely be invited to a telephone interview, followed by a slightly more formal in-person interview. Depending on the business, they may also request other types of tests, such as an error checking test during the interview process. Some companies also require potential employees to conduct a presentation during their interview, depending on the role you are applying for. Interviews offer you the opportunity to show enthusiasm for the particular company you are applying to join. Ensure you conduct ample research, entering the interview prepared with genuine reasons you want to work for that company. You might be asked to attend a finance interview, where you should aim to demonstrate competencies highly relevant to the finance industry. You will also need to prepare for some more generic interview questions. Questions around why you want to leave your current job and your personal accomplishments are common in most industries.
