12 Most Creative Interview Techniques

With high unemployment levels and a paucity of jobs, employers often have to pick among a large number of talented applicants when trying to fill a position. Increasingly, in order to differentiate between numerous qualified candidates, these employers are putting added emphasis on the interview component and using that interview time to assess a person’s personality as well as their experiences.

Specifically, they are more and more often putting interviewees through unconventional questions or activities that seek to test how someone thinks, socializes, and acts on their feet. Here are the 12 most innovative, unconventional, and creative interview techniques:

1. Take all applicants out for a meal at a restaurant

An employer will often tell candidates to meet him at a restaurant instead of in a conference room. Sometimes this meal will quickly devolve into a standard interview; other times, however, this unconventional approach puts a considerable emphasis on courtesy and table manners.

2. Ask questions with no solutions

One of the oldest unconventional tricks in the book, employers often ask questions that have no concrete answer. Such a question may be: “If World War II had never happened, would the Vending Business be selling more or less licorice today?” The goal here is to test a candidate’s creativity and quick-thinking.

3. Ask to be entertained for 5 minutes

This approach is as simple as it sounds, at least as far as the interviewer is concerned. The candidate, on the other hands, needs to come up with an appropriate and engaging story right on the spot.

4. Use social media (ie Twitter)

to force short, quick, and concise answers out of applicants Some tech-savvy companies have turned in recent months to a Twitter-based interview: applicants are asked questions via Twitter and must then respond via the same medium. This approach forces concise responses and makes it easy for employers to compare answers from a range of candidates.

5. Give a case assignment

The case assignment approach has been used for years by finance and consulting firms, but it has now gained more widespread use across a variety of industries. This method involves giving candidates a real-world business problem — often including documents and related memos — and asking them to assess the information, resolve the issues, and arrive at a conclusion.

6. Go on an outing

Golf has long been a sport of choice in the business world, but it is usually played by people who are co-workers or peers — not by those who are looking to get hired. But since the way a person plays golf can say a good deal about his personality, some hiring managers have taken their interviews to the links in recent years.

7. Turn the interview around and have the applicant ask all the questions

A traditional interview establishes clear-cut roles for both parties involved. The employer asks the questions. The applicant answers them. But sometimes, a hiring manger will test a candidate’s flexibility by turning the interview around and asking the candidate to act as the employer. A person’s interests and confidence levels can surface quickly as a result.

8. Ask basic math questions to see how well an applicant can think under pressure

The incorporation of math can make for a stressful interview, even if you have a strong mathematical background. An employer who doesn’t want to hire easily-flustered employees may turn to numbers as a way to quickly and tellingly induce some extra stress in the interview.

9. Ask basic observational questions to see how well an applicant can notice detail

This method entails asking candidates basic observational questions that, one would think, they should be able to answer. For example, recruiters who interview at colleges often ask applicants to describe their school’s seal or logo. Many interviewers are surprised to see how difficult this question can be.

10. Take a psychiatric approach What was your childhood like? Describe your ambitions growing up?

How close is your family? While these questions may seem more appropriate for the therapist’s office than for the interview room, employers who want to get a complete perception of a candidate — and aren’t afraid to brush up against a line of acceptability — will sometimes turn to open-ended questions of such magnitude.

11. Ask for analysis

All candidates will likely enter an interview with some knowledge of the company and some talking points for why they want to work there. But some employers take this a step further by asking the candidate to analyze the company and its operations — replete with pros and cons. Such a test can reveal whether an applicant has done his research and is willing to be honest about perceived faults.

12. Concoct a test of empathy

Assessing whether a candidate is empathic can be a difficult undertaking, but some employers have found a way to make the process more clear-cut: they take an applicant out to lunch, for example, and instruct the waiter beforehand to spill water or mess up the order. The way the applicant responds can be very telling.

While a job applicant these days can still expect a heavy dose of standard interview questions, the more competitive a position the more likely an employer will look to switch things up, assess a person’s personality, and make use of an unconventional approach.

Have you experienced any of these things on interviews? What do you think about these newer approaches to finding the “right” employee?

What Managers Can Learn from Akhilesh Yadav

By Nikita Garia and Shefali Anand

The rise of Akhilesh Yadav, who was sworn in as the chief minister of Uttar Pradesh on Thursday, offers some leadership lessons for India Inc.

Mr. Yadav, who led the Samajwadi Party’s campaign in U.P., is widely credited for the party’s resurgence after a decade.

Political analysts say his efforts to connect with voters and to embrace new ideas for his party have helped him succeed. These strategies would also benefit business leaders who aspire to reach the top, say human resources experts.

Mr. Yadav “cycled across the state and reached out to people in every nook and corner,” says Kris Lakshmikanth, founder of executive search firm The Head Hunters India Pvt. “As a manager, it’s important that your people know you are approachable,” he adds.

Without taking political sides, managers and human resources experts cull some leadership lessons from Mr. Yadav’s campaign:

Know the aspirations of your people:

Mr. Yadav travelled 10,000 km over several months to meet people in different parts of Uttar Pradesh and connect with them.

Similarly, a good business leader should be in touch with people at all levels in the organization.

When employees feel that their leader is listening to them, “it gives them a sense of ownership and they feel they belong,” says Sachit Jain, executive director of textile conglomerate Vardhman Group.

Mr. Jain says he makes it a point to visit Vardhman’s factories across India at least once a year, and conducts town hall meetings and spends time with employees during the office lunch hour.

When employees feel that their leader is approachable “then people can actually share their genuine feelings, their genuine concerns, and ideas,” says Mr. Jain.

On the other hand, “if you are disconnected with your people, they will soon lose the motivation to work with you,” says Vikram Chhachhi, executive vice president of search firm DHR International in Delhi.

He says that Rahul Gandhi disappointed in Uttar Pradesh because he didn’t connect with the locals, even in his home base of Amethi where the Congress party’s candidate was defeated. “If he knew what the people were looking for, his candidates wouldn’t have lost the seats,” says Mr. Chhachhi.

Align goals with employee aspirations:

A political party’s manifesto is akin to a proposal or a promise that a company makes to an employee.

When managers prepare their vision, they need to keep their employees’ personal goals and aspirations in minds. Two key questions for employees are: “Where do I belong, and what do I get?” says Ashok Chandak, senior director of global sales and marketing at Bangalore-based NXP Semiconductors India Pvt.

In his campaign, Mr. Yadav made proposals for both the young and the old.

Similarly, a manager has to “capture the pulse of his employees,” and give them a clear idea of their future and learning opportunities within the company, says Mr. Chandak.

A leader’s task doesn’t end at making promises. “If you don’t fulfill them, you will lose your credibility,” says Mr. Lakshmikanth of Head Hunters.

In politics, that would mean that people overthrow your party, and in the corporate world employees leave the company.

Be open to new ideas:

Mr. Yadav took some radical steps to change the image of the Samajwadi Party. He revamped its manifesto and announced that they would provide laptops and computers to students — something which the party was previously against. To get rid of the “goonda raj” image of the party, he denied tickets to prominent party members who have criminal cases pending against them and instead brought on young people from places like the Indian Institute of Management, says Mr. Lakshmikanth.

Taking a cue from this, business leaders should also be open to new ideas, and keep the team up-to-date with the latest trends in the industry, says experts.

Managers should encourage employees to take new challenges, while providing the assurance that they will back the employees’ actions.

Another new idea which Mr. Yadav implemented was the use of social networking web sites like Facebook and Twitter to reach out to young voters.

“Managers need to connect with their employees in the ways their employees do,” says Mr. Chandak. Most companies today have “internal communication channels that help employees get in touch with each other, the boss, and other executives of the company,” says Mr. Chandak.

Why I am leaving Goldman Sachs

Introspection Time  . . .

New York: Today is my last day at Goldman Sachs. After almost 12 years at the firm - first as a summer intern while at Stanford, then in New York for 10 years, and now in London - I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world's largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs's success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients' trust for 143 years. It wasn't just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.
But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.
I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm's culture on their watch. I truly believe that this decline in the firm's moral fiber represents the single most serious threat to its long-run survival.
Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.
How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader? a) Execute on the firm's "axes," which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) "Hunt Elephants." In English: get your clients - some of whom are sophisticated, and some of whom aren't - to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don't like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It's purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client's success or progress was not part of the thought process at all.
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as "muppets," sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God's work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don't know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client's goals? Absolutely. Every day, in fact.
It astounds me how little senior management gets a basic truth: If clients don't trust you they will eventually stop doing business with you. It doesn't matter how smart you are.
These days, the most common question I get from junior analysts about derivatives is, "How much money did we make off the client?" It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don't have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about "muppets," "ripping eyeballs out" and "getting paid" doesn't exactly turn into a model citizen.
When I was a first-year analyst I didn't know where the bathroom was, or how to tie my shoelaces. I was taught to be concerned with learning the ropes, finding out what a derivative was, understanding finance, getting to know our clients and what motivated them, learning how they defined success and what we could do to help them get there.
My proudest moments in life - getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics - have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn't feel right to me anymore.
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm - or the trust of its clients - for very much longer.
Greg Smith, the writer of this article, is resigning today as a Goldman Sachs executive director and head of the firm's United States equity derivatives business in Europe, the Middle East and Africa.

http://www.ndtv.com/article/world/why-i-am-leaving-goldman-sachs-186001

How To avoid your own career self-destruction

All workers share the common fear of getting fired. Today, people are not only scared of being fired; they fear getting laid off from their jobs…..

Neither is a situation any worker wants to face. What's worse, many factors that play a huge role in making these decisions are out of your control, such as the economy, performance and longevity in the company. To best avoid being faced with a pink slip of any kind, employees should make sure they aren't doing anything to themselves that might affect this decision.

Avoiding self-destructive habits at work seems like common sense, but reasonable thinking is sometimes forgotten when employees try to stand out or learn new habits, styles and techniques in order to stay afloat in their lines of business.

To avoid your own career self-destruction, avoid these 10 habits:

1. Not keeping track of your accomplishments

Let's say the boss is deciding whether to keep you or your co-worker on board. He sits you down and asks, Why should I keep you? If you have nothing to show or tell to prove your case, chances are, you'll be the one getting the boot. Additionally, it's good to keep a running list of awards, promotions and accomplishments to showcase when it comes time for annual performance reviews or when asking for a pay increase. Plus, you never know when you'll end up looking for new work. If you don't keep track of all the good you've done, you might not remember them when it's time to update your resume.

2. Not keeping your skill set current

The business landscape is ever-changing, as exemplified by this tough economy. Right now, you're just trying to keep your job and the best way to do that is to show your employer they are getting the maximum return on their investment: you. Keeping your skill set current, along with expanding it, will show your employer you're worth their money, especially when companies are looking for ways to reduce expenses.

3. Not delivering results

Common sense will tell you that business is about accountability. If you don't contribute to the bottom line, if you cost money instead of make money or if you harbor a sense of entitlement for simply having put forth effort, you are guaranteed to fall by the wayside.

4. Efficient does not equal effective
Those who think that communicating via e-mail, because it's faster than actually talking with people, fail to recognize the importance of personally connecting with others in today's highly automated, technological and competitive environment. One thing that will keep you afloat in this economy is your relationships with people, and those relations can't be grown through e-mails, text messages or BlackBerry chats.

5. Thinking you're irreplaceable
There is no room for divas in the workplace. There are millions of people looking for work right now and, chances are, more than a few of them could do your job. As soon as you convince yourself that you and only you can do the job right, your star will surely start to fall.

6. Knowing all the answers
Knowledge is power. Professing to know it all, however, will stall your career as it shows that you're uninterested in learning about new ideas and approaches. To stay afloat in today's job market, workers need to ask questions, stay current and listen to new ideas.

7. Surrounding yourself with brownnosers
The old adage remains true: You are the company you keep. If you associate with brownnosers, it's most likely because you like having others boost your confidence. This fact will not be lost on those around you. Managers and other professionals will have no problem replacing you with someone who accepts and encourages intelligence and creativity in others.

8. Taking all the credit
Give credit where credit is due. Most managers are smart enough to realize when you inappropriately take full credit for positive outcomes despite the help or input received by others. If you credit other people where they deserve it, you'll be seen as team player, a key element to any successful group. Plus, you'll probably find that you start seeing the same acknowledgement from your co-workers.

9. Not tooting your own horn
Chances are your boss doesn't have time to keep a running tab on each of his employees, so how else will your boss know how valuable you are to the company unless you tell him? Bragging is one thing, but letting colleagues in your industry know of your success through case studies, promotion bulletins or other such tools is another. It's important to recognize the value of letting others know about your accomplishments as long as you go about it in the right way.

10. Losing perspective
Those who fail to recognize their shortcomings are destined for the unemployment line.

Intuitive business people recognize that, despite their best attempts to do everything right, they may sometimes approach roadblocks and need to seek the advice and perspective of a respected friend, colleague or even a business coach. Acknowledging that you aren't perfect will earn you respect in the office.

Management Tips

Overcome the Awkward Silence
Discussions during meetings can be feast or famine. Either you can't get a word in edgewise or no one speaks up. Next time your meeting falls silent, try these tactics:

• Let it be. Wait a moment before breaking the silence and offering a suggestion. The group may need time to reflect on an idea.
• Name it. Call out what's happening, and ask the group about it, "It seems we've gone quiet. Does anyone want to talk about what's going on?"
• Take a break. Sometimes a short break gives people the chance to refocus.

Command Attention like an Executive
Executive presence is not an innate quality; it is a set of behaviors that you can learn over time. Whether you are a natural wallflower or a social butterfly, you can enhance your presence by doing the following:

• Focus and relax. Calm is the foundation of presence. Use your breathing as an anchor that you return to when you get stressed or start to lose focus.
• Gain awareness. To change your behavior, you need to know how you are perceived. Pay attention to how people react to you and ask for candid feedback from those you trust.
• Practice with support. Telling a colleague or mentor you're working on presence can boost your skills and confidence. The feedback you receive can also reinforce momentum.

Maintain Your Mentoring Relationship
Securing the right mentor is a major hurdle, but maintaining the relationship can be just as challenging. To keep the mentoring relationship going, try these three things:

• Provide structure. Set up regular meetings with agendas so your conversations don't degenerate into aimless chitchat. Make sure each meeting moves you toward your goals.
• Expect rigor. If your mentor doesn't provide regular assignments, ask for them, and work them into your agendas.
• Know when to move on. Once you've achieved your goals, move on before the law of diminishing returns kicks in. But stay in touch. Your mentor may become a sponsor who advocates for you even once your formal relationship ends.

Get Comfortable with Collaboration
We praise collaboration for improving problem solving, increasing creativity, and spurring innovation. Done correctly, it does yield all these benefits. But it can also be scary. Here are three facts you have to accept, and embrace, about collaboration before it can work:

• You won't know the answer. There's no point in collaborating on a complex problem if you know how to solve it. Be comfortable with ambiguity and accept that you aren't necessarily the expert.
• Roles will be unclear. Responsibilities are often fluid. Be ready for the role you play to change with each phase of the work.
• You will fight. If you avoid conflict, nothing will happen. Knowing how to debate tradeoffs between options means knowing how to productively argue.

Get Your Colleagues' Attention
To capture any audience's attention, you must frame your message properly. Whether you're making a presentation, composing an email, or talking with your boss, here's how to convey your idea:

• Start with what you want. Busy colleagues don't want to wait for the punch line. Provide the most important information up front.
• Explain the complication. Give the specific reason for your message. What prompted you to deliver it?
• Connect to the big picture. Explain why your audience should care. Point out what is relevant to them and how it links to their goals.
• End with a call to action. Once you've set the context, reiterate what you need.

Note: these are not my original articles, I have received in newsletter from the HBR. thanks for giving your time.

A Perfect Cover Letter

Tips To Balance Your Personal And Professional Life

In the hustle and bustle of everyday life you can feel like you’re in the Indianapolis 500 at full throttle. In your personal life you may have kids, a significant other, friends and family that you try to make time for. Then there is your professional life that can consume a large portion of your day and night depending on where you are in your career.

It is so easy to lose control of your life personally and professionally. The two begin to blend together and you wonder where one starts and one ends. Life has to have some balance to it in order to keep you healthy and sane. This can often seem so hard to do but with a few tips you can find that balance and harmony in your life.

Can you really balance the two? The answer is a simple “yes”. Remember these tips:

1) Plan of Attack – Before you can even begin to get your life in balance you need to first know where your life is out of balance. Are you spending too much time at work and not enough time at home? Are you working on the weekends instead of spending time with friends and family? Ask yourself these questions to determine where you need some adjustment.

2) Family Obligations – Are you married, have kids or a significant other? If so your life then isn’t just about you. So when working on balancing your life, they have to be a consideration as well. What are you missing in this area? Ballet recital for your daughter? Date night with your spouse or significant other? You have to balance life and it has to include these important people in your life. So take that into consideration.

3) Delegate – It’s easy in business to do a lot of things yourself so the job gets done right the first time. However in doing so you are taking away from your personal life. This is where delegation is essential. Delegating is important to balance in your life. Delegate the things that can be done by someone else. Be sure to have good systems in place so that when you delegate there are clear instructions on what needs to be done.

4) Schedule Time for Yourself – This seems to be one of the hardest things for most people to do. It’s also the last thing on most people’s list. You have to take time for yourself even if it is only an hour here or there. It could be something as simple as just taking an hour to read your book for an hour or going on a run. No matter what you do, the goal is to take “some” time for yourself.

5) Prioritize – The key to finding balance is the ability to prioritize. You have to realistically know what needs to be done first and what can be pushed back to a later time.

6) The Art of Saying “No” – We often want to please others and so we take on more and more because someone has asked us to. By doing so you are throwing your life out of balance because sooner or later you’re going to have too much to do and not enough time in the day to do it. Sooner or later you have to say no to some things in order to keep your life balanced and happy.

7) One Thing at a Time – Multitasking was once seen as the way to get things done but realistically it’s easier to focus on one thing; finish it and then move on to the next thing. In some cases multitasking can be distracting. So stay on task, finish it and then move on to something else.

If you don’t have a sense of harmony between your personal and professional life things can take a toll on you mentally and physically. Taking simple approaches like those listed above can help you get your life balanced out so that you can be productive at work and have fun with your family and friends.

Financial Terminology- II

Embedded Derivative

A component of a hybrid security that is embedded in a non-derivative instrument. An embedded derivative can modify the cash flows of the host contract because the derivative can be related to an exchange rate, commodity price or some other variable which frequently changes. For example, a Canadian company might enter into a sales contract with a Chinese company, creating a host contract. If the contract is denominated in a foreign currency, such as the U.S. dollar, an embedded foreign currency derivative is created. According to the International Financial Reporting Standards (IFRS), the embedded derivative has to be separated from the host contract and accounted for separately unless the economic and risk characteristics of both the embedded derivative and host contract are closely related.

Reverse Morris Trust

A tax-avoidance strategy, in which a corporation wanting to dispose of unwanted assets can do so while avoiding taxes on any gains from those assets. The Reverse Morris Trust starts with a parent company looking to sell assets to a smaller external company. The parent company then creates a subsidiary, and that subsidiary and a smaller external company merge and create an unrelated company. The unrelated company then issues shares to the shareholders of the original parent company. If those shareholders control over 50% of the voting right and economic value in the unrelated company, the Reverse Morris Trust is complete. The parent company has effectively transferred the assets, tax-free, to the smaller external company.

ACORN

A Classification Of Residential Neighbourhoods. Directory that groups the UK residential areas into 39 types, (and the US residential areas into 36 types) according to age, composition, facilities, household size, income, marital status, mode of travel to work, occupation, ownership of car, ownership of home, etc. It's based on the concept that areas with similar demographic and social characteristics tend to share common life styles and patterns of buying behaviour. Designed mainly for marketing and promotional campaigns by the UK researcher Richard Webber, and first published in 1977.

Blanket Mortgage

A mortgage which creates a lien on two or more pieces of property. Blanket mortgages are often used by individuals or companies that have more than one piece of real estate, and that want to take out a mortgage or second mortgage on the combined value of their properties. For example, a real estate developer with several undeveloped lots could mortgage those lots in order to build homes on them. Instead of taking a mortgage on each property, the real estate developer takes out one mortgage on the combined value of the properties.

Negative Arbitrage

The opportunity lost when municipal bond issuers assume proceeds from debt offerings and then invest that money for a period of time (ideally in a safe investment vehicle) until the money is used to fund a project, or to repay investors. The lost opportunity occurs when the money is reinvested and the debt issuer earns a rate or return that is lower than what must actually be paid back to the debt holders.

Leading and Lagging

Accounting technique of expediting (leading) or delaying (lagging) receipts and payments of cash to gain a business advantage. In foreign trade, for example, if a manufacturer has to pay $1 million on a certain date for imported material and receives an export order for $1 million, it might try either to delay the payment for imports or to press for an early payment by the buyer, or both, so that the cash inflow from export is used as cash outflow for imports. It will thus try to escape devaluation risk in import-payment and default risk in export-receipt by juggling two cash flows. Similarly, in transactions between the subsidiaries of the same firm, receipts and payments of cash may be delayed or expedited to defer taxes.

Foreign Exchange Derivatives

Any financial instrument that locks in a future foreign exchange rate. These can be used by currency or forex traders, as well as large multinational corporations. The latter often uses these products when they expect to receive large amounts of money in the future but want to hedge their exposure to currency exchange risk. Financial instruments that fall into this category include: currency options contracts, currency swaps, forward contracts and futures contracts.

Financial Terminology

Price to Book Ratio

A stock's capitalization divided by its book value. The value is the same whether the calculation is done for the whole company or on a per-share basis. This ratio compares the market's valuation of a company to the value of that company as indicated on its financial statements. The higher the ratio, the higher the premium the market is willing to pay for the company above its hard assets. A low ratio may signal a good investment opportunity, but the ratio is less meaningful for some types of companies, such as those in technology sectors. This is because such companies have hidden assets such as intellectual property which are of great value, but not reflected in the book value. In general, price to book ratio is of more interest to value investors than growth investors.

Private Mortgage Insurance – PMI

A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults. Most lenders require PMI for loans with loan-to-value (LTV) percentages in excess of 80%. This allows the borrower to make a smaller down payment of as low as 3%, instead of about 20%, and usually requires an initial premium payment and possibly an additional monthly fee depending on the loan's structure.

Business Tax

Five major types of business taxes are: (1) corporate franchise tax, (2) employment (withholding) tax, (3) excise tax, (4) gross-receipts tax, and (5) value added tax (VAT). Some types of firms (such as insurance, mining, and petroleum extraction companies) pay additional taxes peculiar to their industries. While firms too pay income, property, and sales taxes, such taxes are not specific to businesses. In terms of economic impact, however, all taxes are 'people taxes' because they affect human beings and not some abstraction labeled 'business.' Also called business activity tax.

Currency Swap

An arrangement in which two parties exchange specific amounts of different currencies initially, and a series of interest payments on the initial cash flows are exchanged. Often, one party will pay a fixed interest rate, while another will pay a floating exchange rate (though there may also be fixed-fixed and floating-floating arrangements). At the maturity of the swap, the principal amounts are exchanged back. Unlike an interest rate swap, the principal and interest are both exchanged in full in a currency swap.

Aggregator Model

Electronic commerce business model where a firm (that does not produce or warehouses any item) collects (aggregates) information on goods and/or services from several competing sources at its website. The firm's strength lies in its ability to create an 'environment' which draws visitors to its website, and in designing a system which allows easy matching of prices and specifications. See also affiliate model.

Credit Union

A non-profit financial institution that is owned and operated entirely by its members. Credit unions provide financial services for their members, including savings and lending. Large organizations and companies may organize credit unions for their members and employees, respectively. To join a credit union, a person must ordinarily belong to a participating organization, such as a college alumni association or labor union. When a person deposits money in a credit union, he/she becomes a member of the union because the deposit is considered partial ownership in the credit union.

How to Write a Cover Letter That Employers Will Actually Read

When you're applying for a new job, you often have to write a cover letter to accompany your resume and serve as an introduction to who you are. These letters must be brief yet compelling so you don't require much of the reader but still appear unique. This can be pretty tough, but if you utilize the principles of good storytelling and concise writing you can put together a letter that won't get lost in the pile. Here's how.

Title photo by Wrangler (Shutterstock).

Most cover letters tend to be fairly formulaic and look something like this:

Dear [EMPLOYER],

I would like to express my interest in [SOME POSITION] at [COMPANY]. Although I've explored many options in my job search, I've come to respect the quality and integrity of the work that you do. For example, I was very impressed by the latest television campaign for Kellogs. I love creating great advertisements for television, radio, and print, and believe I would be a good asset to your company. I'm a hard worker who thinks outside of the box while producing creative work in an efficient manner. I believe you'll find that my four years of experience at [SOME OTHER COMPANY I CLEARLY WANT TO LEAVE OR WAS FIRED FROM], and my resulting portfolio, mirror these qualities. I look forward to hearing from you and exchanging ideas about what I can offer [COMPANY].

Thank you for your consideration.

[APPLICANT]

If you read a letter like this, you wouldn't cry blood or toss it in the garbage in favor of getting a root canal. It's a perfectly acceptable letter by letter-writing standards, but it's also pretty generic and ineffective. It doesn't tell you anything about who the author is, any compelling reason why they're interested in their work or the company they're hoping will employ them, and really does nothing at all to stand out from the crowd. In this post, we're going to look at how to avoid letters like these and write interesting, unique cover letters that target the reader.

Know Your Audience

Your audience is your prospective employer, and while you can never know exactly who will be reading your letter you can know the company. You don't want to craft a letter in which you try to be everything you think your target company might want, but you do want to take who the company is into account. Chances are there were a few things you liked about the company before deciding to apply. For example, if you were looking for a job at the industrial design firm IDEO, you may have gotten excited when you heard about the giant airplane wing protruding from one of their offices or perhaps you just liked what you saw when they redesigned the shopping cart for an ABC news special. Whatever made you like the company, or got you excited about the job, likely tells you a thing or two about the corporate culture. This information is very valuable when writing your cover letter.

First of all, knowing the way a company operates will hint at the level of formality they'll expect from a letter. If you were applying for a job at Lifehacker, for example, you'd want to write something more casual. At a bank, formality would likely be more appreciated. Design firms and other creative companies generally fall somewhere in the middle. If you know the company, you should have a pretty good idea of what's fitting. Going back to the IDEO example, you could get away with a statement like this:

Ever since I saw the giant airplane wing crashing through the wall of your offices I knew IDEO was a place I wanted to work.

Something like that probably wouldn't get you very far at a bank, but this could:

The first time I scanned a check with my smartphone I was delighted by how simple deposits suddenly became. Now that I am in the market for a job, I immediately though of Chase because I want to help to create the tools that make banking a pleasure.

These statements compliment the company. They show that you know detail about the company, so you're not just applying abitrarily. They show that you appreciate the work the company does and they provide insight into who you are and what you carea bout. When you're writing your cover letter, knowing your audience can help you do this. You may be applying for a job because you want any job, but that doesn't mean you can't do a little research and find something you like and respect about your prospective employer. Doing so will give you the opportunity to connect with them in a very brief moment and help you avoid getting stacked in a pile of generic applicants.

Photos by Dominiek ter Heide and Adam Piontek.

Know Yourself

You can't be someone else, so don't try. This is good advice for life, and is especially relevant when applying for a new job. If you try to present yourself as the worker you think the company wants, you're going to end up with boring statements that don't really say much about you. Your resume can sell your skills and experience. Your cover letter needs to sell you as a person, and give the company a reason to want you. It's an opportunity to put your best (and most relevant) foot forward, and you should take it. I think Joel Spolsky, founder of Fog Creek Software, explains this idea best:

The number one best way to get someone to look at your resume closely: come across as a human being, not a list of jobs and programming languages. Tell me a little story. "I've spent the last three weeks looking for a job at a real software company, but all I can find are cheezy web design shops looking for slave labor." Or, "We yanked our son out of high school and brought him to Virginia. I am not going to move again until he is out of high school, even if I have to go work at Radio Shack or become a Wal*Mart greeter." (These are slightly modified quotes from two real people.)

Who you are matters. It's true that some companies are mostly interested in hiring people who will simply get the work done, accept a low salary, and never complain, if you're applying for a job you're actually going to like then chances are you matter. Put a little of yourself into the cover letter. You're not sharing your disease history. You're sharing your personality in a way that's relevant to the job you want. It's fun. It's an excuse to be honest, and you increase your chances of getting a job, too.

Photo by Luke Baldacchino.

Show, Don't Tell

One of the most common mistakes people make in any kind of writing is that they tell their audience what they want them to know. Just as you'll generally find explanations to be dull in a film, your prospective employer will find them to be dull in a cover letter. There's no sense in telling anyone that you're a hard worker or a team player because you'll be 1) expecting that they'll trust such a generic statement and 2) among many other undesirable candidates who write the same thing. If you're going to provide reasons why you're great, provide an undeniable example instead.

The best way to do this is look back on your work history—or even something relevant that you created outside of your professional life—that made you feel proud of what you can do. Tell a story about that in a few short sentences:

For her 9th birthday, my daughter wanted brownies just like the ones they make at her favorite restaurant. I accidentally spilled a little pudding mix into the batter, only to discover a trick that made one of the best desserts I've ever had. I can replicate a recipe like the best of them, but it's the mistakes I've made while baking that remind me of how much I love it.

You can tell anyone anything, but you have to provide an example to demonstrate why they should believe your claims.

Photo by Les Chatfield.

Demonstrate What Every Employer Wants to Know

Most employers care about the following three things above all else:

1. You're smart.
2. You'll get things done.
3. You'll fit in well with their corporate culture.

Before you sign and send your cover letter, do your best to ensure those three things are implied. Again, you don't ever want to actually say them, but you want your reader to think them when they've finished reading your letter.

Never Write the Same Letter Twice

Every time you apply for a job your audience changes. The job changes. Chances are you've changed a bit, too. While you can certainly re-use elements from previous cover letters when they are applicable, it's very important to remember that the exact same cover letter is going to have a different impact on different people. As you go ahead and apply for different jobs, remember that they are different. You'll want to craft your cover letters to express that.