Financial Reasoning Tests (2024 Guide)

When applying for a role within a bank, or any other financial firm, you will likely be asked to complete a financial reasoning test.

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 in 2024?

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:

Conversely, some questions will be purely to test your mathematical knowledge.

For example:

The financial aptitude test will not ask you to show your work. However, from selecting the correct answer, it is clear that you understand the underlying algorithm.

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.

A financial reasoning test also measures your ability to work well under pressure.

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 in 2024

Ask the Employer Who Their Provider Is

Most employers are very willing to disclose the provider they choose to supply their financial reasoning tests.

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.

Frequently Asked Questions

Final Thoughts

• Financial reasoning tests are primarily used by employers in the banking and finance sectors. However, they often transcend into other industries.

• The tests are used to challenge a range of skills, including mathematical ability, time management and work under pressure.

• Financial aptitude tests include various questions, with a range of graphs, charts and large quantities of text.

• Many practice exams can be found online and should be utilized before the test.

• Passing the financial aptitude test generally leads to a telephone or an in-person interview. These latter stages give candidates an excellent opportunity to showcase their personality and secure the role of their dreams.