Finance Interview questions in genpact

Obligation -- the requirement imposed on a debtor to pay a debt and the legal right of a creditor to enforce payment.

Obligee -- a creditor.

Obligor -- a debtor.

Obsolescence -- the loss of value or usefulness usually over a period of time, because of wear, changing technology or user preference.

Occupancy rate -- the percentage of space or units that are leased or occupied.

Odd lot -- a block of shares of less than a round lot, usually traded at one time. (A round lot is a multiple of 100.)

Off-balance sheet activities -- the business activities of a savings association that generally do not involve booking assets (loans) and taking deposits. Off-balance sheet activities normally generate fees, but produce liabilities or assets that are deferred or contingent and thus, under GAAP, do not appear on the institution's balance sheet until or unless they become actual assets or liabilities with a value or cost that can be determined. Examples include guarantees substituting the institution's own credit for a third party such as in standby letters of credit; interest rate swaps; foreign exchange forward options; repurchase agreements; loan commitments; and recourse associated with sales of assets.

Offer -- an expression of a willingness to sell something at a given price; opposite of bid.

Offering -- an issue of securities or bonds presented for sale.

Office of the Comptroller of the Currency (OCC) -- see Comptroller of the Currency.

Office of Federal Housing Enterprise Oversight (OFHEO) -- a government agency responsible for ensuring the financial safety and soundness of the nation's two largest players in the secondary mortgage market, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). OFHEO is an independent office of the Department of Housing and Urban Development, and was established by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

Office of Financial Institution Adjudication (OFIA) -- an office that houses administrative law judges who conduct adjudicatory hearings for the federal financial institution regulatory agencies: the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the National Credit Union Administration. OFIA is housed at the Office of Thrift Supervision.

Office of Thrift Supervision (OTS) -- a bureau of the Treasury Department that was authorized by Congress in the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to charter, regulate, examine and supervise savings institutions.

offsite improvements -- improvements in land development that are off the development site, such as utility lines, sidewalks, gutters and curbs, that enhance the value of the development.

On account -- describes the application of a payment to reduce the outstanding principal of a loan.

On margin -- the situation in which an investor borrows part of the purchase price of a security from the broker selling that security.

Onsite improvements -- any construction of buildings or other improvements within the boundaries of a property that increases the value of the property.

On-us checks -- a depositor's check that is presented for payment at the same financial institution that carries the account on which the check is written. A financial institution would use the term to refer to checks drawn on accounts it holds and presented for payment at its counter.

Open-end credit -- a consumer line of credit that may be used repeatedly up to an established overall limit. Commonly known as revolving credit or a charge account, in which the customer may pay in full or in installments that include a finance charge. The term does not include negotiated advances under an open-end real estate mortgage or a letter of credit.

Open-end investment company -- see mutual fund.

Open-end lease -- a lease that requires a balloon payment based on the value of the leased property when the lease expires.

Open-end mortgage clause -- a provision in mortgage contracts in some states, that declares the mortgaged real estate may be used as security for future additional advances from the original lender, if the lender and borrower agree. All subsequent advances under this clause represent a claim on the property dating back to the time of recording the original mortgage.

open market operations -- purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the Federal Open Market Committee, in order to influence the volume of money and credit in the economy. Purchases of government securities inject reserves into the depository system and foster expansion in money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and flexible monetary policy tool.

Open mortgage -- a mortgage loan that can be paid off, without penalty, at any time prior to maturity.

Operating budget -- a detailed projection of all estimated income and expenses during a given future period.

Operating capital -- funds available for use in financing the day-to-day activities of a business.

Operating expenses -- charges incurred as a result of the customary savings and lending business of a thrift institution, not including interest on borrowed money, interest paid to depositors, nor taxes. Operating expenses include such items as salaries and related compensation costs, office space, furniture, fixtures and equipment, advertising, deposit insurance premiums, and professional and supervisory fees.

Operating income -- for thrift institutions, income generated by the customary lending and deposit taking business of an association; sometimes called gross operating income. Major operating income items include interest earned on loans, loan fees and charges, net income from service corporations and subsidiaries, stock dividends received and earnings on reserves.

Operating subsidiary -- a subsidiary of a federally chartered savings institution that engages only in activities permitted the parent thrift institution. Unlike service corporations, the stock of operating subsidiaries may be sold to non-thrift investors. See service corporations.

Opportunity cost -- the difference between the yield that funds earn in one use and the yield they could have earned had they been placed in an alternative investment generating the highest yield available.

Option -- an agreement granting the right to buy or sell property, or to use it in some fashion, for a stated price within a stated period of time. In investments, an option refers to a contract granting the right to buy or sell a security or a commodity at a set price within a stipulated time.

Option day -- the specified date when an option expires unless it is exercised.

Optional delivery -- a mortgage loan purchase program offered by the Federal Home Loan Mortgage Corporation in which the seller/servicer may decide not to deliver the loans and thus not consummate the sale.

Ordinary income -- income subject to taxation at full or ordinary rates rather than at favorable capital gains rates.

Original face -- the original principal amount, or face value, of a mortgage-backed security.

Originate a loan -- to make or issue a loan; the process whereby a lender qualifies a borrower, appraises the collateral, processes all documents, advances funds and places the loan on the books.

Origination fee -- a charge imposed by a lender for the evaluation, preparation and processing of loan applications.

Outgo -- slang referring to any expense or cost.

Out of the money -- the situation in which the fixed price of an option turns out to be a less favorable price than that currently available in the market, resulting in a loss for the investor. The holder of an option to sell a security is out of the money when the option price is lower than the market price. Conversely, the holder of an option to buy is out of the money when the option price is higher than the market price.

Outstanding check -- a check that has not yet been presented for payment to the financial institution on which it was drawn.

Outstanding debt -- that portion of a debt which remains unpaid. Outstanding loan balance refers to that portion of principal that has not been repaid.

Overdraft -- a draft or check written for an amount that exceeds the funds in the account on which the check is drawn.

Overdraft protection -- a line of credit that is activated when a customer writes a check that totals more than the funds in his or her checking account. With overdraft protection, the institution on which the check is drawn automatically loans money to the checking account when an overdraft situation occurs.

Overdue -- the status of a payment that is late and not yet paid.

Overhead -- the cost of equipment, materials and services that are necessary to conduct business but are unrelated to the products or services the firm offers.

Overnight money -- any money that replaces daily. It generally refers to funds that are loaned by one institution to another overnight, including but not limited to the federal funds market.

Over the counter -- the buying and selling of securities that are not listed on an organized exchange. Trading is handled by dealers through negotiation rather than through the use of a stock exchange's auction system.

Overzoned -- the zoning of real property to permit development that exceeds the practical present highest and best use of the land.

Owe -- to be obligated to pay something to someone in return for value received.

Owner-occupant -- a property owner who occupies his or her property, as distinguished from an absentee landlord or owner.

Ownership -- the state of holding a lawful claim or title to property.