Find Interview Questions for Interactive brokers group

Right Answer:
The steps involved in factoring operations are:

1. **Invoice Generation**: The business issues invoices to its customers for goods or services provided.
2. **Invoice Submission**: The business submits these invoices to a factoring company.
3. **Verification**: The factoring company verifies the invoices and the creditworthiness of the customers.
4. **Advance Payment**: The factoring company provides an advance payment (a percentage of the invoice amount) to the business.
5. **Collection**: The factoring company takes over the responsibility of collecting payments from the customers.
6. **Final Payment**: Once the customers pay the invoices, the factoring company pays the remaining balance to the business, minus a fee for their services.

Right Answer:
Registered debentures are recorded in the name of the owner, and interest payments are made directly to the registered holder. Bearer debentures, on the other hand, are not registered to any owner, and interest is paid to whoever physically holds the debenture.

Right Answer:

Feature	Convertible Debentures	Non-Convertible Debentures
Conversion	Can be converted into equity shares after a specified period	Cannot be converted into shares
Interest Rate	Generally lower, as conversion is a benefit	Usually higher, compensating for no conversion option
Investor Benefit	Potential for capital appreciation through shares	Fixed income without ownership stake
Risk Level	Moderate, due to equity conversion option	Lower, as it’s purely debt

Right Answer:
Factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party (the factor) at a discount in exchange for immediate cash.

The procedure for factoring typically involves the following steps:
1. The business identifies its accounts receivable to be factored.
2. The business applies to a factoring company and submits the invoices.
3. The factoring company evaluates the creditworthiness of the business's customers.
4. Upon approval, the factoring company advances a percentage of the invoice value (usually 70-90%).
5. The factoring company collects the payment from the customers when the invoices are due.
6. Once the customers pay, the factoring company releases the remaining balance to the business, minus a fee for the service.

Right Answer:
A company can reinvest the profits back into the business, distribute them as dividends to shareholders, pay down debt, save for future expenses, or use them for acquisitions or investments.