Equities
Give a broad explanation of equity markets (bonus points if you know the first company to reach a $3T valuation)
What is AAPL
What is fixed income, what are reasons to invest in it, and give two examples of fixed income securities
Bonds - diversification, capital preservation, income - Treasuries, corporates, MBS, TIPS, etc
What are derivatives, and name two common types
Financial contracts whose value is derived from an underlying asset — examples include options and futures.
What are commodities, and give two examples of “hard” and “soft” commodities
Basic goods traded globally; hard commodities include oil and copper, soft commodities include wheat and coffee
What are alternative investments, and list two common types
Non-traditional assets outside stocks and bonds — such as private equity, private credit, hedge funds, or real estate
Explain the difference between the primary and secondary markets for equities - what is each usually called. What exchanges are primarily used for primary market offerings?
IPO vs APO - NYSE vs Nasdaq
Explain the trade-off between credit risk and yield in bond investing. What is the main inverse relationship we see in fixed income markets?
Bonds with higher credit risk offer higher yields to compensate investors for the greater chance of default - price and yield has an inverse relationship
What are options contracts and how can they be used to hedge a portfolio? How can companies use futures contracts to hedge in their business operations?
Options: Contract that gives you the right (not obligation) to buy a security at a predetermined price. Calls and puts - Buying put options protects against downside risk, like insurance for your holdings. Buying futures to secure oil and jet fuel prices
Which 3 commodities hit all-time highs in 2025? (bonus points if you know which was today)
Gold, Silver, Beef
What are pros and cons of investing into private assets over public markets?
Pro: Diversification (uncorrelation), potential alpha, exclusive offerings, lower volatility, value creation
Cons: Illiquidity, less regulation, complex, higher fees
Who are the 5 largest companies by market cap? (bonus points if name them in order)
NVDA, MSFT, AAPL, GOOG, AMZN
What is the benchmark fixed income instrument to evaluate the health of the US economy. What influences short term vs long term rates?
10Y Treasury - short term is fed funds rate and long term is inflation expectations
How does buying a call option differ from buying the underlying asset directly, in terms of risk and potential reward?
Buying a call option limits the downside to the premium paid but offers upside if the asset rises, whereas buying the asset exposes you to the full downside but also captures all upside - options provide hedging and more defined risk
How does a weaker U.S. dollar tend to affect global commodity prices?
It usually raises them, since commodities are priced in dollars and become cheaper for foreign buyers
Private equity firms often use leverage when buying companies. What is it called when they use leverage? How does leverage amplify both potential returns and risks for investors?
Leveraged buyout (LBO) - Leverage increases returns when the company performs well because borrowed money magnifies profits. But it also heightens risk — if performance falters, debt costs can wipe out equity value
Why would a company repurchase their stock? What should happen to earnings per share (EPS) and their stock price?
They think their stock is undervalued, want to return cash to shareholders, or offset dilution. EPS should increase as there are less outstanding shares. Stock price rises.
What is duration and why is it important. If we expect rates to fall, do we want to be holding longer or shorter duration bonds?
Duration: a bond's price sensitivity to interest rates - longer duration bonds
A trader sells a put option with a strike price of $50 on 100 shares of a stock that is currently trading at $60. They collect a $5 premium per share. At expiration, the stock is trading at $55. What is the trader’s profit?
the premium collected, $5 × 100 shares = $500.
What are the two price benchmarks for crude oil? Have they been rising or falling this year? (bonus points if know the current price of either)
West Texas Intermediate (WTI) & Brent
WTI: $59/b
Brent: $63/b
Explain what Real Estate is and why an investor might want to invest.
Mortgage rates have climbed from 3% to over 7% in two years. How does this shift impact housing affordability and transaction volume? (bonus if you know what the 30Y mortgage rate tracks)
Real estate includes land and buildings that generate income and can appreciate over time. Investors like it for diversification, inflation protection, and steady rental cash flows
Higher mortgage rates make homes less affordable, reducing buyer demand and slowing sales activity. The 30-year mortgage rate generally tracks the 10-year U.S. Treasury yield
How do changes in interest rates and inflation expectations interact to influence equity valuations?
Rising rates and inflation lower present values and raise discount rates, which can compress valuations — while stable inflation and falling rates generally boost them.
Explain what the yield curve is, what it shows, and what usually happens when we see it inverted curve (bonus points if you can say when was the last time the curve inverted and uninverted)
Line graph that plots the yields of bonds with the same credit quality across 30 years - the curve shows where we can expect short term rates to go - inversion has historically led to recession (2022-2024)
A portfolio manager wants to protect against a market crash while still benefiting from moderate market gains. Which derivative strategy would achieve this, and why?
Use a protective put: hold the stock and buy a put option on it.
During an unusually cold winter in the northern U.S., natural gas demand for heating spikes. However, storage levels are already below the five-year average and production from shale basins is flat. What is the most likely effect on Henry Hub natural gas prices, and why?
Prices are likely to rise sharply, potentially more than during a typical cold snap due to low storage and flat production
What is private credit?
Private credit has grown rapidly as banks have pulled back from lending. What factors have driven this shift, and what risks do investors face compared to traditional bonds?
Tighter bank regulations and higher yields have pushed institutional investors toward private credit. However, these loans are illiquid, less transparent, and carry higher default risk — especially in a rising-rate environment