Landing a Quant role in an investment bank is highly coveted yet extremely competitive. As a Quant, you will be working on cutting-edge mathematical and statistical models for derivatives pricing, risk management, and quantitative trading strategies. To stand out from the crowd and impress Quant interviewers, it is crucial to demonstrate exceptional technical skills in programming, statistics, stochastic calculus, and financial theory. This article provides an in-depth look at commonly asked Quant interview questions across top investment banks, along with proven strategies to prepare.
Master probability, statistics and stochastic calculus
You must have a rock-solid foundation in probability, statistics and stochastic calculus to analyze financial time series and price derivatives. Expect questions testing your knowledge of distribution properties, statistical tests, Ito’s Lemma, Brownian motion, stochastic differential equations, and more. Revise key concepts and work through quantitative interview prep books like Heard on the Street and A Practical Guide to Quantitative Finance Interviews.
Showcase coding skills in C++, Python and R
Quants rely heavily on programming to build models and analyze data. You will likely face coding questions or be asked to code live. Ensure you can code fluently in C++, Python and R, the typical Quant languages. Practice coding interview questions on LeetCode and Quant technical interview platforms like Quantopian. Highlight experience building and backtesting trading strategies or quantitative research projects.
Demonstrate derivatives pricing expertise
Pricing exotic derivatives and fixed income products is a major part of the Quant role. Study key models like Black-Scholes, binomial trees, Monte Carlo simulation and finite difference methods. Expect derivatives pricing questions requiring mathematical derivation and numerical implementation. Showcase your financial engineering skills by applying models to price real instruments.
Understand market risk and portfolio optimization
Quants build models for market risk measurement and portfolio optimization. Expect questions on VaR, Greeks, covariance matrices, portfolio return and risk attribution. Know risk management methodologies like RiskMetrics, credit risk modeling, and be familiar with optimization techniques like quadratic programming.
Highlight communication and collaboration skills
While much of the Quant role is technical, you will need to collaborate across the business. Interviewers want to assess your communication skills and teamwork ability. When answering behavioral questions, focus on quantifying research, explaining complex models simply, tailoring communication, and working cooperatively to implement trading strategies.
By honing probability, statistics, programming and financial engineering skills, Quants can demonstrate the technical expertise needed to pass investment bank interviews. Showing ability to communicate complex models also helps secure Quant offers.