15 most common interview questions in banking and finance

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Some of the most common interview questions for an investment banking interview include (some are a bit difficult but they come up very often, increasingly as a way to narrow down candidate lists as the job market increases). graduates in finance becomes more difficult):

  1. How many degrees (if any) are there in the angle between the hour and minute hands of a clock when it is quarter past three? [Typically asked during investment banking interviews for entry level investment banking graduate jobs]
  2. Find the smallest positive integer that leaves a remainder of 1 when divided by 2, a remainder of 2 when divided by 3, a remainder of 3 when divided by 4, … and a remainder of 9 when divided by 10 [Asked during interviews for quantitative finance jobs]
  3. Two standard options have exactly the same characteristics, expect one to have a long term and the other a short term. Which one has the highest gamma? [Typically asked during interviews for bank derivatives trading jobs]
  4. How to calculate the delta of an option? [Asked during investment banking interviews for derivatives trading jobs]
  5. When can hedging an options position make you take more risk? [Typically asked during interviews for trading jobs]
  6. Is it better to use the implied standard deviation or the historical standard deviation to forecast volatility? Why? [Asked during interviews for quantitative finance jobs]
  7. Describe “duration” and “convexity”. Describe their properties and uses [Typically asked during investment banking interviews for graduate investment banking jobs]
  8. Two players A and B are playing a game of marbles. Each player has a red ball and a blue ball. They present a marble to each other. If both are red, A wins $ 3. If both are blue, A wins $ 1. If the colors don’t match, B wins $ 2. Is it better to be A or B, or does it matter? [Asked during interviews for quantitative finance or derivatives jobs]
  9. How do you “value yourself”? Here “value” means in financial terms [Typically asked during interviews for MBA finance jobs or experienced banking hires]
  10. What sets you apart from other candidates we might hire? [Typically asked during investment banking interviews for graduate investment banking vacancies]
  11. If you could take a road trip across the country with three people, who would you choose? Why? [Typically asked during interviews for corporate finance / mergers & acquisitions banking jobs]
  12. Talk about an action you love or hate and why [Asked by job interviewers for any accounting, finance or job!]
  13. What is the difference between default risk and prepayment risk? [Typically asked during interviews for credit jobs / risk management jobs]
  14. How would you move Mount Fuji? [Typically asked during investment banking interviews for consulting jobs or graduate accounting jobs]
  15. Estimate the annual demand of cars for car batteries [Typically asked during interviews for corporate finance jobs, mergers & acquisition banking jobs or consulting jobs]



Source by Agustin Valecillos

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