Discussion on case studies of various finance companies.
Acquire information on different interview formats.
Get accustomed to analytical and programming.
Course Description:
This is a one-on-one course for providing proper individualistic approach and prepare you for quant finance interviews. This course will help you in making a proper strategy to crack the interviews. It consists of 6 classes of an hour each. It will focus on various questions that can be asked during the interviews & how to tackle them. Different case studies of various quant finance companies will also be discussed so that you can tackle such questions with ease. Both Aptitude & Financial part would be taken care of. Proper materials would be provided along with some recommendations for books.
Course Package:
06 Live online interactive classes
03 Assessment test
02 Online test
01 PDF
06 Videos
Key Takeaways:
Be fully prepared for quant job.
Get all mandatory information for cracking interviews.
Get all necessary material you need for quant interviews.
Other Details:
Presentations and PDFs will be provided.
Class duration: 1 hour/class.
Course Content:
Class No.
Topic
Class Duration
1
Course structure – Making changes to the plan
1 hour
2
Soft Quantitative Aspects in Finance and News
1 hour
3
Excel, VBA, MATLAB, R, SAS, SQL Revision
1 hour
4
Calculus and C++
1 hour
5
Puzzles and Qualitative Aspects
1 hour
6
Revision/Doubt Clearing
1 hour
Areas To Focus on For Interview Prep (with demo questions)
You can reasonably expect to be asked the following questions:
Why our company?
Why this particular position? (Especially if your degree is in an unrelated field)
Describe a time when you were a leader in a team situation
Tell me about a conflict that you experience within a team, and how you resolved it.
Tell me about a time when you succeeded under stressful circumstances
Which financial markets interest you at the moment?
Why should we hire you over all the other candidates?
Types of Questions You May be Asked:
How would you value a certain company?
Pitch me a stock
How would the rise of China threaten the German economy?
What is the exchange rate between the Euro and the American dollar?
What are some problems investors might face in the future?
Where do you see yourself in 5 years?
Give an example of a moral dilemma your have experienced
How do you cope with stress?
You are sitting in a boat in the middle of a lake (alone) and drop in the anchor - Does the water level increase or decrease?
Tell me about something interesting that you have read recently
How would you convince a client that their request cannot be met?
What will you be doing in your first year at GS?
Give me a recap of your life in 30 seconds
How many manhole covers are there in London?
Last experience:
Question on projects: this becomes important
Leadership position / independent work
Areas of concern:
Tell something about you
Confidence
Entrance
20 seconds 50%
HR
Never assume next question
specialty
Body language
Eyes
Tone consistency
Hard-cored personality
Selling yourself
Strategic Exaggeration
Recent vs old achievement
Leveraged to strong areas
Quant maths
Rounds of Interview: Layers
Value for money
react vs respond
artificiality for selling
Battles are won in mind
Breaking the ice
women vs peer vs old men
Smiling at right times
Greeting at right times
Reactions and emotions not allowed
Correlated weakness
Games with no truth
Verbal Skills are imp like GMAT
Supply demand
Technical vs HR
Switching demand and supply
Supply demand in jobs: Arrow diagram of jobs means plotting supply and demand. Its a pure case of supply demand, hence if you go in a area where demand is less and supply is also less then that is a better strategy than going to supply more, demand area. This is my personal belief and my strategy. Because people are less also the demand is less there are chances of better negotiations.
Dealing with HR people: HR people should be dealt with appropriately. There are various people and layers that decides your entry in an organization. Much of things depends on your qualifications and the place you do your PG from, hence this becomes one area of negotiations even if you can do the job of more qualified people. Hence in this case CFA, FRM and other exams become very useful.
Company size decision:
Small: No Big names, freedom, high pay, more learning that you can do.
Big: Adds to resume, more extra stuff, foreign assignment, less learning from self.
Questions for you are:
When HR says no more negotiations do they mean so?
How to catch mis-match in demand supply?
If you are getting better each day, how does too often switch matter? (Example 2 yr exp in good company vs 1 year in 2, and clearing exams like FRM/GMAT in the break)
How really less are the Quant jobs in India?
How to increase the interview count, how to move from Door to Door when email does not work?
Solutions and Discussions
Memorize all answers.
Learn about job, role and sector.
2-3 minutes is what it matters.
Positive mind, never react when forced to, take deep breath when angry or nervous.
Learn to lie, this is game of demand and supply.
Emphasis on knowing Research, Analysis, Reporting or which role that is.
What can you do that others cannot do.
First 6 months are tough with no Saturday and that is all right with you.
Least attractive: Political and diplomatic answers.
All negative answers: deal politely.
Do not condemn others, talk about yourself only.
Desire to progress/ recognition when due/ opportunity and suitability/ applying myself/ diversification / team working/ synchronized research / etc are reasons to join.
Be open minded.
Psychology of interviewers.
Definition of position or works that you need to know, do you know this?
Different types of analyst.
Working on tough past.
again understand the profile very carefully.
Ask them in a very soft and humble way.
How long would you like to work with us.
Do you know how to deal with company politics / backstabbing / trust deficit.
Avoid words like until/unless/my opinion.
Over Qualified answer.
Standard questions and answers.
Flasehood and lying with HR.
Ego issues in job.
Goals and targets.
3 failed ventures.
Websites of interview Questions.
Consultants are also important and they can be contacted at a later stage.
Developing Financial Acumen:
Looking at news and presentations
News
Great men says
Macro Economics
Reading news
Technical question:
10 Examples of Monte Carlo.
10 examples of linear regression in Quant Corp Fin / Fin risk.
Econometrics: Multicollinearity, how to remove it.
Logistics regression.
Interpret rate paths using excel.
MATLAB for interest rate paths.
Are the risk different in HFT?
Volatility modeling using Heston.
Weakness:
Small errors
Over aggressiveness and over exerting
Preacher, giver of more that is needed
50 Standard Questions of HR:
Memorize all of them
Greatest weakness
What to ask them in the end:
Exact Profile
CFA FRM study leave
Relocation issues
Read about company
Guess supply demand
Body Language like nodding
Links:
Find company info
How to develop
Linkedin
Coaching
Teacher
Spirituality Link
Technical questions in Finance interviews:
Financial ratios (to find out problems in the company with balance sheets)
Valuation of companies CFA level 2
Modeling used in the industry
Questions in Quant finance jobs are very different:
Technical questions for Investment Banking / Equity valuation:
FCF/DCF
Enterprise Value
Ratio modeling / Price to book ratio
Footnotes auditor's report n Management Discussion
Du-point analysis
Different Version of Resumes:
Once you know how many areas you want to go in, then according to need you can change your resume. Hence for that you should have different version of resumes. The areas that you need to cover are:
Credit / Market Risk/ Quant Resume FRM L2
Equity Research / Investment Banking / Private Equity Resumes CFA L2
Hence you should have at-least 4 version of resumes. Salary things, 10 times factor, Symbiotic relations.
Other strategic issues:
Issues like bond, movement, absconding, etc must be taken care of before joining ideally.
Company reimbursement of CFA FRM exam fee.
Notice period buy-able
Getting in touch with peers is another important thing
Major banks that everyone in finance wants to work are:
Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and UBS AG
As far as India goes most of them are in Mumbai or Bangalore.
Citi is in Mumbai, JP Morgan is in Mumbai, Goldman is in Bangalore, DB is in Mumbai and Bangalore, Morgan Stanley is in Mumbai, UBS is in Hyderabad, Barkley is in Mumbai.
Heard on The Street: Quantitative Questions from Wall Street Job Interviews - Timothy Falcon Crack
One on One Customized Training:
qcfinance.in believes in personalized touch so that our clients are completely satisfied with our service. In this regard, we offer One on One Customized Training to our clients.
These Training are provided on requests by our clients & are customized according to their individual needs.
The course structure & timings for these training are highly flexible, classes are scheduled as per the convenience of our clients.
Custom Video Solutions:
In yet another innovation to simplify things for our learners, qcfinance.in has introduced the Custom Video Solutions Options. If a learner has some specific query but don't have the time to come to live online class, then he/she can ask for custom video solution for the query. qcfinance.in will make a video recording that will be uploaded to YouTube or given directly to the learner in mp4 format for there viewing. A learner can go through the recording as per there convenience. If still doubts exist, he/she can email us anytime for clarifying them.
Contact Us for More details: info@qcfinance.in
In this regard my preparations has been bit misguided, where I have not been coherent. First I will take you through my prep and then we will look at the most idea prep. My past preps:
Subject GRE Maths: Given this exam and failed 2 times (2009,2011)
Monte Carlo/Game theory/Decision Tress: Have read game theory a lot, published some research on use of game theory for Nanotech
SAS Base/adv/Miner(Predictive) also Mathematic: Used MATLAB a lot in Reliability Engineering
Stochastic Calculus / Martingales (all three are hardcore Mathematical terms). Ito and derivation of Black scholes and random particle KTG models (part of Quantum Physics)
Derivation of all Distributions, freedom of movements (since regression class)
Financial Time series is like signal processing
Although most of things that I have learned are hard earned intuitive ways which is from very basics. I do plan to add their videos. But as an advice you should know all these areas if you are interested in working in Quant Positions.
Now you will ask these questions to yourself:
How much would you weigh my focus on these 3 areas: Fin basics/Maths/programming?
If I plan to give CFA, SAS Predictive modeling & FRM exams I will know lot of finance but not the mathematical part which are not taught anywhere but in Ivy. Can you suggest me on how to work on that lacking part of hifi-quant?
Answer to these questions are not direct, but yes you have to practice and sort out things yourself.
Course interpretation from Quant Finance:
The courses are divided into 3 areas: math+programming+fin basics. The maths consist of: Stochastic Calculus and has:
Brownian Motion
Ito calculus
Martingale
Partial Differentiation
Once you know a little bit about all these things you can feel quite comfortable with Quant areas.
I will be reading Monte Carlo Models and Black Scholes as the two main mathematical pillars of mathematical finance. There are various versions of mathematical derivations but I will try to explain them in my videos. BS is all about physics, gas liquid forces etc. Whereas MC is about stat. more toward programming side.There are many videos on the area that you can check out. The model of your system however remains to be derived by you.
There are also books on Interview of Quant on Wall street that you can check out, the major points still remains the one I am talking about and the rest covers things of CFA and FRM.
FRM & Quant:
FRM touches both BS and MC but not in details, it rather goes for a broad knowledge.Chapter: Valuation and risk models, also imp to pass the exam.Monte carlo is in quant. Both are given in very basics.
I think FRM and Financial risk a kind of practical application of Financial Maths/Engineering because risk is the area where quant is used a lot more than other area. Hence in the long term Quant people might go to derivatives or other areas of risk management. May be it is so complex: things like CDS, and IRS that they need very complicated models which are tough in FinMaths.
About my work in this area:
I studied integration from its roots in 2005 and 2006, then I studied partial differential in 2007-2008, that time I never knew that after few years I will be moving so hardcore into Quant profile. But yes it is fun to be in this area. I went to engineering but physics was my 1st love, I went for job, but doing business is my main goal. But Quant is something that I like doing, and will be doing.
Brownian Motion (also used in Monte Carlo Simulations)
It kind of reminds be of Schrodinger equations where things are related using partial differential equations to other areas. Here things are related to drift and volatility.
Binomial trees and various risk neutral methods and some other assumed in binomial distribution are interesting and time consuming to understand.
My views about applicability of models: In the long run things depends on political policies and strategy, whereas in the short term it depends on the movements and big players and how they are changing their portfolio and hence there needs to be linking point between quant analysis and portfolio movements. Also there are portfolio of commodities+stocks+bonds and then generally basic quant looks likes short termed technical analysis with mathematical derivations.
Derivation of Black Scholes
A daunting task as it requires knowledge about engineering calculus.
Youtube also has some good videos on Quant finance, which you must check out to start your preparations:
Paul Wilmott
Bionic
CFA Level 2 has multiple regression and Time series, two chapters which will help you deal with Quant Finance, but you should maintain good understanding so that you can maintain the strategic advantage that you have in this area. There are few books on time series for finance which I have downloaded and will look into for improving my knowledge.
CFA Level 2 Quantitative Techniques for Finance
In the last session I studied Time series so I remember it the most. In that I found that still regression was used where it was regressed with the old data in a linear way. I think that the subject is build in a way that everything is kept linear. ARCH, Auto regressive, regression of errors with earlier errors, unit B1 or random walk was an important area. Random walk in its advanced form is used for Black Scholes. We were checking everything using p values and t stat which became clear last week, thanks to a friend. One thing that still gives me problem is that why we are dividing it 1/root(n) when we are testing the auto regressive for season effect, where does this comes from. But of-course I am also making a note of all the distribution so that things become logical and easy.
I was doing some research on various quant areas, I found these areas very good:
Neural network, genetic algo, etc for kind of technical analysis
Trading Algo, high freq trading is another area
Reinsurance and catastrophe modeling is another quant area
Hence there is something for every quant in different areas in quant.
Quant finance takes a different flavor when we talk about commodity derivatives which has their fundamental attached for each of the commodity (oil, agri, silver, gold, etc). Hence it become a case specific study on how to apply quant in modeling of derivatives for commodities and also Forex.
I will add a post of Quant for commodities, as this area is not given clearly in any of the place.
Model implementation (Tree, Monte Carlo, Finite Difference):
FX: Black-Scholes, Local Volatility, Heston & Local Stochastic Volatility
IR: Hull-White, Black-Karazinski, CIR & SABR
Requirements 'Quantitative Analyst' where FRM helps is as follows:
Quantitative modeling to provide risk measurement and hedging solutions which is there in FRM
Developing stress testing and scenarios analysis tools which is there in Excel programming, also there in FRM L2
Basics of VaR Concepts, Liquidity risk, Tail Risk Measurement.
Development of Statistical & Mathematical Models in C++, Matlab, R but this needs to be done by you
In broad way this is area is about Pricing of instruments across asset classes
Hence, FRm here gives a good understanding of risks concepts including market risk, and operational risk
Quantitative Finance is compulsory including:
Vanilla and Exotic Derivative Products (Options, Futures, Swaps, Exotics such as Cliquets, Rainbows, Cappuccinos/ Stellars, Share Repurchases, Timer Options, Variance Swaps)
Models (Single factor, Multi factor, Mean Reverting etc) such as:
Local Beta
Hull-White Local Volatility 2 Dimensional Partial Differential Equation (PDE)
Markov Functional
Uncertain Volatility
Black Scholes
Local Volatility
Heston model
Merton Jump Diffusion model
Templates
Variance and Corridor Variance Products
Worst of Barrier
Overnight/Geared share repurchase (OSR/GSR)
Cappuccino-Stellar
Timer Option
Uncertain Volatility Model (UVM) Portfolio
Advanced knowledge of Equities and basic know of Fixed Income
Derivatives Trading Strategies
Greeks (such as Volga, Vega, Gamma, Theta, Delta, etc.)
Development experience is must esp. in C++, Python, Excel/VBA, and Structured Query Language (SQL). Knowledge of Standard Template Library (STL) and Data Structures is must.
My Targets:
Quant 22
Port 23
Fi/Der 24 25
Copr 26
Ai 27
Eq 28
FSA 29
Ethics 30
200 questions each day.
Last month strategy. single minded focus needed.
In this article I will outline some strategy for the CFA level 2 exam. To start with, I personally would advice to go through Economics and FSA again as they are some of the areas which are very interesting and very broad, also they will take a lot of time to settle in your mind.
Economics is the most interesting topic today for the entire world in the light of currency and debt collapses so I think it will be the easiest to start with slowly. And the other one which is FSA is the largest and most interesting subject that helps you to understand the pillars of finance.
I checked Scz of Fixed income and derivatives, now if the things are done in momentum the under lying logics can be imbibed the mind. The glimpse that I had in Fixed income and Derivatives made me feel that they will not give me trouble
Portfolio is nearly the same as I studied and things looked fair.
I will be writing about some of the intuitive ways to understand and apply and see in the real world some concepts of economics, part of which I will write in my research post.
Resources that are very good:
Scz & All for CFA L2 esp videos
Sas materials are provided by coaching
Monthly Strategy as planned on Dec5th:
Dec 2011: Eco and FSA (CFA)
Dec 2011: Foundation of Risk Management (20% of FRM and a total theory topic with no Quant)
Thinking of SAS certificates
Dec 2011: SAS software, MATLAB Finance toolbox, and other modeling tools like Excel finance
Jan 2011: CFA and Modeling
Carry over to Jan: Eco+FSA (CFA-L2) & Foundation of Risk Management
Monthly strategy for the exam:
Jan 2011: Registrations
Feb: Financial statements analysis + Corporate Finance (Economics, Equity touching)
March: Portfolio Management + Fixed income
April: Derivative + Quantitative
May (Practice the tests)
June (Exam on 3rd June 2012)
Financial Statement analysis of CFA level 2 consists of broadly these areas:
Inter-corporate investment
Pensions
Merger and Acquisitions
Multinational Operations
Analysis in details of Cash flows
This is something very interesting and will require some time to get in.
When I looked into the Analysis of operating cash flows, the topics and areas covered and taken are very very fascinating and will help in understanding the games that are played with Cash flows. I will be taking this subject as the first to start with in the L2 study.
Economics for CFA Level 2:
This is a very short area, and has topics related to global/international economics. There are small small topics picked up and made up into a chapter. And these topics are taken from various sources, which are cited clearly. The most interesting area is International asset pricing. Overall it is not as interesting as Level 1, no marginal graphs, no complexities, and not so much depth. But this is an opinion after going through it once.
Interest rate parity
Currency conversion
International CAPM
Synchronizing my effort from Level 1 to Level 2(for Dec 2nd week):
Portfolio is one are directly taken as it is form 1 to 2, and it is also bit imp for FRM
Derivative is same as FRM Level 1 and CFA Level 1
Equity is again taken directly from 1 to 2 so it highly related
Eco seems to be very different, and of-course quant is not a problem (less linked up)
Fixed income remains normal,
Ethics is again as it is from there to here
Corporate is same
Rank from toughest to easiest for me:
Economics
Financial Reporting
Corporate
Rest are same, Derivatives Fixed income covered in both
Easiest being Equity
Independent areas:
International asset pricing (Eco)
CDO (quite independent)
I am trying to make some presentation on these areas. Strategy to make Videos of CFA Level 2, priority list:
Portfolio Management
Derivative
Equity
Forex is covered in Economics, and will start this to know bit about currency.
Areas covered in Excel Financial modeling pertinent to CFA level 2:
FCFF (Equity)
FI Bond Portfolio and Z spreads (best understood when talked on excel)
Corporate Wacc question of optimizations
Waiting for Derivatives in Excel, macros in excel, VBA to cover some part of level 2
Most of the features of excel are covered in this regard Jan end: The Modeling done on Excel for all Equity valuations are taken from CFA level 2, hence this is one thing that gets linked, and some of the M&A and Investment banking areas comes from Corporate which makes this area interesting.
Whereas if I think of difficulty then FSA becomes most tricky, hence keeping an eye on it is a better idea.
Pages linked to time to read:
On an average these books vary from 300-600 pages, thus 300 pages books requires 300*5 minutes and so on. You can break it down to like 50 pages to be done in one sitting of 2 hours, and note making.
FRM will cover a lot of derivatives and fixed income so the only thing left will be FRA. I can do quant side by side using financial time series and regression books so those things will not be a problem.
Conclusion: Strategy for the 2 exams are discussed, my personal views on strategy is described.
