Sunday, February 11, 2007

Weirdest questions from hedge fund and ibanking interviews

I have one final round interview to go tomorrow morning in the City, but am pretty relaxed since I already have two offers :-), so I feel like the recruiting is over and can safely share some of the funniest interview questions I got.

I already share
d my favourite brainteaser from a hedge fund interview. Overall I found the hedge funds much more innovative in asking questions, while the banks ask the typical brainteasers that everybody who has prepared a little bit already knows (can you believe I was asked "why are manhole covers round?"!!!). My next favourite question, also at a hedge fund was:

- "I have to ask you... do you like money?"
I looked the guy straight in the eye and said
- "yes, of course I like money".

He sighed in relief "that's good, because in the end this is all about making money, and if you care more about the details of the company than about the money, this is not the place. You look at a company, you buy, two weeks later you sell, you move on."
The question was tricky because every vault guide says in ibanking interviews you should never admit to being interested in money - you are supposed to care more about client service, industry trends etc.. Luckily I went with my intuition and turned out to be right.

The other interesting question from the hedge fund interviews were
- "okay, I have seen your CV, tell me about yourself but without mentioning anything on your CV, tell me who you are beyond your CV"

The banking questions were more mainstream in a way but nevertheless there were quite challenging or at least interesting ones

- "Imagine you have a client who tells you he always only decides based on price. If you quote him the lowest price, he will do business with you, if not, he will take his business somewhere else. What would you do?"

- "We have invited 15 of your classmates for the final round. Why should we take you and not your classmates?"

- "Tell me about a time in your work when you really felt the power of a team and what a team can achieve"
(I thought this was a much nicer question than "tell me about a time when you worked in a team...")

- "What do you think is the next big investment opportunity in the markets that can offer spectacular returns?"

All the other questions were pretty standard I believe -
- why do you want to do this?
- why do you want to leave consulting?
- draw me the US yield curve.
- How do you calculate forward rates?
- where do you think interest rates are going?
- where's gold?
- what do you think determines the oil price
- what's happening in Venezuela?
and so on, just checking awareness of the markets

Overall, I enjoyed most of the interviews since they were challenging, but I am very happy it is over we don't need to answer such questions any more :-).

By the way, for those preparing for sales & trading, global markets or hedge fund interviews, I found the following books helpful to get an overview of the industry and also to learn about derivatives - even for the summer positions they do ask a lot about options and it really helps to understand their background:
Inventing Money: Long-term Capital Management and the Search for Risk-free Profits
This is a great book to learn about derivatives and the story of the brains behind the derivatives industry, as well as the pitfalls of relying on formulas to invest billions.

Hedgehogging (Penton Audio)
This is more of a fun read from the founder of hedge fund Traxis Partners, Barton Biggs. It gives a great insight into the more long-term macro-level thinking that characterizes successful investors.

Practical Speculation
Another great book on investing by former George Soros partner, Victor Niederhoffer. He writes about interesting myths and tricks in investing and about market psychology. It's good to read some of these broader books in case you are asked what kind of things you have read on investing or how you would invest your money, as these books give you some creative ideas on how to think about investing money.


Anonymous said...

Just wandering...
when you get such an obvious brain teaser, such as why are manhole covers round? do you pretend like its the first time you have heard it, or do you let the guy know that you already know the answer.
I was just pondering on what do in such a scenario.

angie said...

no, I did not pretend, I said that I have known this one for years and the one thing I know is that there is no correct answer to it. Then I added that if they want me to brainstorm, however, it could be this or that (just listing two possible reasons). I did not spend much time on it because I knew it is useless and they changed the subject after that.

But in general with other brainteasers (maths ones) I think the best is to pretend you don't know and just solve them.

Brava Diva said...

Thanks for this, it's good to have something to practice on (a little premature for me as I am just my one-year programme later this year!)

Alex said...

))) the question about manholes is a classic interview question in IB...weird they actually still ask it.

JD said...

Thanks for the many interesting posts. This one about interview questions was interesting. Funny to compare some of the questions that seem "easy" vs others that they ask. OK - dumb question - I cannot access your friend VJ's blog (! It says I have to be invited... Not sure how I can contact VJ for an invite if I cannot get past the PERMISSION DENIED screen!

angie said...

Hi JD, unfortunately VJ closed his blog down and stopped blogging, so even I can't view his blog anymore, it doesn't exist anymore :-(. I should take the link away from this post I guess.