Quant Careers
This professional writes code in to build the ultra-fast trading infrastructure.
What is a Quant Dev?
If a trader buys a stock expecting its price to go up, they are "long"; if they sell borrowed shares expecting the price to fall, they are this
What is Short?
If you flip a fair coin twice, this is the probability of getting two heads in a row.
This metric measures how asset's price fluctuates over time
What is Volatility?
A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?
What is .05?
This professional focuses on reading data and finding statistical patterns rather than executing manual trades
What is a Quant Researcher?
This term refers to the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept
What is the Bid-Ask Spread?
If you pull a single card from a standard 52-card deck, what is the probability of drawing a King or an Ace?
What is 8/52?
This famous formula is used to calculate the theoretical fair price of European options. (Hint: We had a workshop over this)
What is Black-Scholes-Merton?
You have a 3-gallon jug and a 5-gallon jug, with unlimited water. How do you measure exactly 4 gallons?
What is fill the 5-gallon jug, pour into the 3-gallon jug until full (leaving 2 gallons), empty the 3-gallon jug, pour the 2 gallons into the 3-gallon jug, refill the 5-gallon jug, and pour into the 3-gallon jug until full (pouring exactly 1 gallon, leaving 4 gallons)?
This professional monitors portfolio exposure and stress-tests portfolios to ensures loss limits are met.
What is a Quant Risk Manager?
This contract gives the buyer the right to buy a stock at a specified strike price before expiration. (For both American and European Options)
What is Call Option?
What is the expected value (average) of rolling a standard 6-sided die?
What is 3.5?
Calculation: (1 + 2 + 3 + 4 + 5 + 6) / 6
This property combines uncorrelated assets to lower portfolio risk without sacrificing expected return
What is Diversification?
You have two ropes that each take exactly 60 minutes to burn from one end to the other, but they burn unevenly. How do you measure exactly 45 minutes?
What is light Rope 1 at both ends and Rope 2 at one end simultaneously; when Rope 1 burns out (30 min), light the other end of Rope 2 (burns remaining 30 min in 15 min, totaling 45 min)?
Hedge funds like Citadel or Millennium are referred to by this term because they deploy their own capital
What is the Buy-Side?
An order that only executes at a specified price or better is this.
What is a Limit Order?
If an event has independent trials, this distribution is used to count the total number of successes in repeated trials.
What is Binomial Distribution?
This measures the sensitivity of an option’s price relative to changes in the price of underlying.
What is Delta?
You toss a fair coin until you see your first H. What is the expected number of total flips required?
What is 2? (1/p = 1/0.5 = 2)
This professional quotes both a "bid" to buy and an "ask" to sell, profiting off the spread
What is a market-maker?
When identical assets trade at two different prices at the exact same moment, taking advantage of the discrepancy is known as this
What is Arbitrage?
A casino offers a game where you flip a fair coin: you win $10 if it lands Heads, but lose $6 if it lands Tails. What is the expected payoff of playing once?
What is +2$?
Calculation: 0.5 × 10 - 0.5 × 6 = 5 - 3 = 2
This ratio divides an investment portfolio's excess return over the risk-free rate by its volatility
What is the Sharpe Ratio?
You have a drawer containing 10 black socks and 10 white socks. What is the minimum number of socks you must pull out to guarantee you have at least one matching pair?
What is 3?