15 Most Common Banking & Finance Interview Questions

Some of the most common interview questions for7. Describe "duration" and "convexity". Describe their
an investment banking interview include (some are aproperties and uses [Typically asked during
bit on the tough side but they DO come up veryinvestment banking interviews for graduate
often, increasingly as a means of trimming down theinvestment banking jobs]
candidate lists as the finance graduate job market8. Two players A and B play a marble game. Each
gets harsher):player has both a red and a blue marble. They
present one marble to each other. If both present
1. How many degrees (if any) are there in the anglered, A wins $3. If both present blue, A wins $1. If the
between the hour and the minute hands of a clockcolors do not match, B wins $2. Is it better to be A
when the time is a quarter past three? [Typicallyor B, or does it matter? [Asked during interviews for
asked during investment banking interviews for entryquantitative finance or derivatives jobs]
level investment banking graduate jobs]9. How do you "value" yourself? Here "value" means
2. Find the smallest positive integer that leaves ain financial terms [Typically asked during interviews
remainder of 1 when divided by 2, a remainder of 2for MBA finance jobs or experienced banking hires]
when divided by 3, a remainder of 3 when divided by10. What distinguishes you from other candidates we
4,... and a remainder of 9 when divided by 10 [Askedmight hire? [Typically asked during investment banking
during interviews for quantitative finance jobs]interviews for graduate investment banking
3. Two standard options have exactly the samevacancies]
features, expect that one has long maturity, and the11. If you could go on a cross-country car trip with
other has short maturity. Which one has the higherany three people, who would you choose? Why?
gamma? [Typically asked during interviews for bank[Typically asked during interviews for corporate
derivatives trading jobs]finance / mergers & acquisitions banking jobs]
4. How do you calculate an option's delta? [Asked12. Tell be about a stock you like or hate and why
during investment banking interviews for derivatives[Asked by job interviewers for any accounting,
trading jobs]finance or job!]
5. When can hedging an options position make you13. What is the difference between default and
take on more risk? [Typically asked during interviewsprepayment risk? [Typically asked during interviews
for trading jobs]for credit jobs / risk management jobs]
6. Are you better off using implied standard deviation14. How would you move mount Fuji? [Typically
or historical standard deviation to forecast volatility?asked during investment banking interviews for
Why? [Asked during interviews for quantitativeconsulting jobs or graduate accounting jobs]
finance jobs]15.