Finance Recruiting: Investment Banking and Sales and Trading Interviews
Sales and Trading Interview Questions: What Do They Want to See?
The recruiting process typically starts with an online application, moves into a HireVue video interview or phone interview, and then concludes with an assessment center if you’re in EMEA or Hong Kong – or a Superday if you’re in North America.
“Interview questions” will come up in all parts of this process, from the HireVue or phone interview to the AC or Superday.
We’ve covered sales & trading assessment centers in the article on the rates trading desk, so please refer to that for tips.
Professionals want to see the following qualities in your responses to interview questions:
Being an athlete helps a lot because it demonstrates your drive and risk-taking ability.
Most candidates enter sales & trading out of undergraduate programs, but some are also hired from Master’s programs and MBA programs (though MBA hiring is far less prevalent).
There are also a few transfers from the middle office and other teams at the bank.
The main categories of sales and trading interview questions are:
The initial HireVue interview focuses on generic fit / behavioral questions, but a few simple market-based questions could also come up.
After the first round, interviewers will usually start by asking for your story, but they’ll quickly move into the other categories above.
Multiplication
Multiplying a 2- or 3-digit number by a 1-digit number is straightforward because you just separate them into smaller groupings:
For 2×2 multiplication, put the number with the larger second digit first and then group them into smaller units once again:
sales and trading interview questions
You need more information. How was the market/S&P 500 last year? How did other funds perform? What is the strategy of Fund X? How did it achieve the 50% return? Generally, past performance does not guarantee future results, and a longer history of outperformance is required to determine whether a fund a truly superior to its peers.
To understand why this is a relevant product, an investor looks at the value of a standalone mortgage versus a pooled mortgage trust. If an investor has one individual mortgage, the standalone default or prepayment risk is high. If there are thousands of mortgages, the defaults will blend into an effective interest rate on the MBS.
A stock represents ownership of a company’s assets after senior claimholders (eg. bond holders). A bond generally has a fixed maturity and pays a specific interest, while stock holders have a residual claim on the earnings of a company after interest expense, and can be paid a dividend. Stock holders typically have voting rights, while bond holders do not.
A straddle (buying a put and call with the same strike or exercise price and expiration date) is best in this situation. This question is somewhat misleading as an investor would only enter into this straddle if they felt that the implied change in price would be much larger than the premiums paid, so if the swing was not large enough this may not be a good strategy.
You need to know what the interest rates are in Canada and the US, and the consensus on where they’re moving towards. You also need to know who the governor of the Bank of Canada is (Stephen Poloz and his tacky suits), and who the Chair of the Federal Reserve is (Janet Yellen).
