Trading Floor
The difference between the prices that a trader is willing to buy a security at and sell a security for
What is the bid-ask spread?
An asset class where you lend money to a borrower in exchange for regular interest payments and the return of your original principal.
What is a bond?
Framework used to answer behavioral questions.
What is the STAR method?
What is 289?
The current Federal Funds Rate.
Role on a trading desk that designs custom and complex financial products for a client, typically derivatives.
What is structuring?
The middle section of the yield curve.
What is the belly?
A brief, 30-60 second description of your background, career experience, and club involvement.
What is an elevator pitch?
What is the probability that the first business day of a randomly chosen month is a Monday?
3/7.
A month can start on any of the 7 days of the week with equal likelihood. Business days typically exclude weekends (Saturday and Sunday), so if the first day of the month is a weekend, then the next business day defaults to Monday. If it starts on a Monday, the first business day is Monday.
Thus, 3 out of the 7 starting days (Monday, Saturday, Sunday) result in the first business day being a Monday.
Magnificent 7 company that recently got a new CEO.
What is Apple?
The main risk-based determinant of the difference between a trader's quoted bid and ask price.
What is liquidity?
Term referring to a group of the most heavily traded and liquid currencies.
What is G10?
An action you should always take after finishing an interview.
What is sending a thank-you email?
A driver is going to drive 100 miles. If they drive the first 50 miles at 50MPH, how fast do they have to drive the second to average 100MPH for the entire run?
Trick question! It's mathematically impossible to average 100MPH, since you already used up your hour by driving 50 miles. You would need to cover the other 50 in 0 seconds, which cannot be done.
What is gasoline?
A type of trading that has declined since 2008, in which firms use their own capital to profit from positions.
What is proprietary trading?
What is duration?
Portion of a behavioral question's answer that you should spend the most time on.
What is action?
You are in a completely dark room. There are 20 different socks in a drawer in this room, 10 of which are white and 10 of which are black. What is the minimum number of socks you should grab to ensure you have a matching pair?
You should grab three socks.
In the worst-case scenario where your first two socks don't match, your third sock must match either the first or the second sock, completing a pair no matter what.
10Y Treasury yields recently hit their highest level since this pre-crisis year.
What is 2002?
The name for the barrier between investment banking teams and trading desks at a bank.
What is a Chinese wall?
The most well known formula for options pricing.
What is Black-Scholes?
The first impression on your interviewer that you have control over is through a...
What is a handshake?
You are faced with two doors. One door leads to your job offer, and the other leads to the exit. In front of each door is a guard. One guard always tells the truth. The other always lies. You can ask one question to decide which door is the correct one. What will you ask?
"If I asked the other guard which door leads to a job offer, what would they say?"
If you are talking to the truthful guard, he will honestly tell you what the lying guard would say. Since the liar would point to the exit, the truthful guard will point directly to the exit.
If you are talking to the lying guard, he will lie about what the truthful guard would say. The truthful guard would point to the job offer, so the liar will lie and point to the exit.
Because both guards will point to the exit, you simply choose the other door to claim your job offer.
What is the ECB?