Common interview/processing questions in quantitative finance

Posted: July 31, 2010 in Uncategorized
Tags: ,

I have been given the privilege of interviewing many candidates over the years.  In this time, I have noticed several commonalities in the interview questions in the Chicago trading industry that I will share with you.

The first stage of the interviewing and selection process begins with a cattle herd of candidates into a room where they are all given the same test.  It is then graded and call backs are given to those who have excelled on the initial examination.

The typical sections of the initial examination are:

1.  Mental math:  You will be expected to be able to do at least 20 problems such as 0.002*3 and 0.28/4 with only pencil and paper.  You should be able to do this easily.  If not then you won’t advance to the next stage of the interview process.

2.  Logic: You will be given several questions such as a car traveling to (…) at (…) rate then another car goes the other direction they both turn right at continue for some amount.  What is their distance from each other?

3. Statistics: You can plan to be given a few basic poker questions in this section.  Roulette is also a nice play here.

After taking this examination, if you do well you can plan to move on to a smaller interview with 2 or more interviewers.  They will bombard you with every conceivable question that is on your resume and many that are not.  One of the ones that arises in finance since many of the candidates have educational backgrounds that are not in the finance or financial engineering field such as myself is “why would you want to work in finance, you have a XYZ degree?”  Other fun ones:

1.  Oh I see you listed XYZ programming language on your resume…..walk me through a sample program (take your pick from a random number generators to some fun approximations).  The goal of all this is not to stump you but determine you ability to think critically and how creative you can be.

2. Wow, you’ve taken alot of options theory classes, price this XYZ option (by the way its an exotic)?

3. Throw in random cash flow, convexity, and/or duration questions for fun here.

If you can handle much or all of this then you are probably well suited for your interview…..Good luck.

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