Financial Reasoning Test Practice
Applying to the FSA or a top financial firm? About to sit a Mendas-style financial reasoning test? Learn about these tests and get a chance to practice fundamental financial concepts with JobTestPrep.
Financial reasoning tests are actually numerical reasoning tests that present basic financial concepts through texts, tables, and graphs. Instead of receiving only a set of charts or tables that contain information required for answering the question, financial oriented tests include a short description of a scenario, accompanied by extracts of numerical data.
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The mathematical basis for these tests is simple arithmetic: the four basic operations (+,-,÷,×), percentages, ratios, interests and averages. The time frames for these tests usually exceed those of standard numerical tests, since they introduce more textual information which is critical for understanding the question.
The Difficulties of Financial ReasoningFinancial reasoning tests are considered more difficult than ordinary numerical tests for many reasons:
- Unlike standard numerical tests, data is presented both verbally and numerically. Passages of 150-220 words are likely to accompany each set of questions which demands an ability to discern, filter and extract relevant information.
- These tests introduce financial definitions and concepts that most people are not acquainted with. Terms like profit margin or market capitalization, which are universal conventions in the finance world, might turn a question to be seemingly more complex, regardless of how simple their mathematical representation is.
- Unlike numerical reasoning tests whose questions usually require no more than 3-5 mathematical calculations and rely on universal concepts, financial reasoning tests can ask for more elaborate calculations and application of newly introduced mathematical expressions.
- Psychology of course plays an important role in this test. Employers want to see if a person can draw conclusions and assumptions using pure logic even when he is not fully familiar with a specific field of knowledge.
- The scoring method of this test is also different. Wrong answers reduce points, while a 'new answer' choice allows the test taker to state that he does not know the answer.
Relevant CompaniesThe type of companies who are likely to carry out this kind of assessment include mainly financial institutions, such as banks or firms of accountants and insurance companies.
At JobTestPrep we have included articles on many of these kind of companies who may use a Financial Reasoning test as part of their assessment. These organisations include:
Read more about numerical reasoning:
Numerical critical reasoning
Numerical reasoning tables
Numerical reasoning graphs
Numerical reasoning percentages
Currency conversion questions
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