Sales & Trading interview guide – Quantitative topics
Its that time of the year again. You have made it through the initial selection rounds but you are worried about the quantitative interview. If you are one of the lucky few, you already have an offer but you have thinking about taking a running start before you hit the trading desk.
The sales & trading interview guide serves as a quick refresher for quantitative questions you should expect to be tested on during the recruiting and interviewing process for investment banking roles. Given the nature of the quantitative interview there is a lot of ground that needs to be covered and your preparation should start a few weeks before your interview date.
We cover nine core quantitative themes that need to be mastered in addition to your personal, background, fit and motivation interviews. In terms of reading time the first eight items can take a full day to cover, a little longer to completely process and digest.
The two video courses that follow would need four hours to complete, but the Black Scholes course may require revisiting a few times before you are comfortable with its content. If you are out of time and need to be selective, just focus on (5), (6) and (8). The Black Scholes model is the basis of almost everything we do on the pricing, valuation and risk management side. Not being comfortable with it is a significant disadvantage. Doesn’t matter if you speak to clients, with other traders in the group or with firm wide risk, everyone assumes that you understand the foundation on which modern finance is built.
Here is the technical Sales & Trading interview guide’s laundry list of topics.
- Understanding Greeks – (Options trading desks – also see volatility surfaces)
- Risk & Treasury Models – (Pricing & Valuation – based on 1 credit risk & pricing course)
- Risk & Treasury Case Studies – (Fuel Hedging, market risk, swaps, economic capital)
- Asset Liability Management – (Required for Insurance, Pensions, Banking, Capital Arbitrage interview focus)
- Monte Carlo Simulation – (Pricing & Models – Exotics, Trading, Pricing interview focus)
- Advance Risk Management Models – (Assorted exotic topics including portfolio optimization)
- Economic Capital – (Economic Capital estimation for banking – alternate approach)
- Understanding Black Scholes – (Free video course -Understanding N(d1), N(d2) – 102 minutes)
- Risk Basics Crash Course – (Free video course – Quant crash course – 117 minutes)
Sales & Trading Interview Guide – Background reading
Best of luck for the interview. Drop us a line if you would like us to add more topics to this list.