Quantitative Finance Interview Questions | Glassdoor

# Quantitative Finance Interview Questions

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Quantitative finance interview questions shared by candidates

## Top Interview Questions

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### Quantitative Finance Summer Associate at Morgan Stanley was asked...

Aug 5, 2010
 At a party everyone shakes hands, 66 hand shakes occur, how many people are at the party? 9 Answers12requires explanationit's not 12, it's 11Show More Responses12sum of the series 66= n/2( 2*1 + (n-1)*1) n=12You can suppose there are n people in the room and think of them in a row. The first one has to shake hands with (n-1) people (because he doesn't have to shake hands with himself). The second one has already shaken hands with the first one, so he has (n-2) shakes remaining... and so on. So you have to sum: (n-1)+(n-2)+(n-3)+...+1= (n/2)*(n-1) Then you have to solve (n/2)*(n-1)=66 and you get n=12.n(n-1)/2=66 so n=12You can think of this problem as a combination problem: (N choose 2) = 66, and then solve for N. That is, N! / (2! (N-2)! ) = 66. Simplifying this equation leads to N(N-1)/2 = 66, and the integer solution to this problem is N = 12.66=x!/((x-2)!*2) which gives 12

### Quantitative Finance Summer Associate at Morgan Stanley was asked...

Aug 5, 2010
 There are two stocks with the same expected value, with variance 0.3 and 0.2 and correlation 0.5. What proportion of each stock do you invest in to yield a minimum risk portfolio? 4 Answers100% in stock 2, with the smaller variance.No, if you can short, the variance could be reduced even further since the stocks are correlated.17/44 of the stock with variance of .3 and 27/44 from the stock with variance of .2Show More ResponsesCovariance = 0.3 * 0.2 * 0.5 = 0.03 Cov Matrix = c = [0.3 0.03; 0.03 0.2] Inv Cov Matrix = c_inv = [2000/591 -100/197; -100/197 1000/197] Answer = (c_inv * [1; 1])/([1 1] * c_inv * [1; 1]) = [17/44; 27/44]

### Quantitative Finance Summer Associate at Morgan Stanley was asked...

Aug 5, 2010
 Evaluate the integral from 0 to pi/6 of sec(x) dx.3 AnswersReaching back to high school, I'd say -.5ln(3)/2ln(root 3)

### Quantitative Finance Summer Associate at Morgan Stanley was asked...

Aug 5, 2010
 If W is standard Brownian Motion, for what values of n is W^n still a martingale? 3 AnswersBy Ito W^n is a martingale for n=0,1Agree, for any n>1 you get a drift termXt is a martingale you get f(Xt) is a martingale if f is linear otherwise convexity or concavity will increase or decrease the expectation, think of Jensen inequality.

### Quantitative Finance Program at Morgan Stanley was asked...

Sep 13, 2010
 In a set of cereals, there are 4 kinds of coupons. A child wants to collect all the 4 kinds of coupons. How many boxes in average should he buy? 3 Answers25/3169/16sorry, should be 25/3

### Quantitative Finance at Morgan Stanley was asked...

Jan 27, 2011
 Say you have one bacterium now. In any minute, each living one has a quarter chance of dieing, a quarter of staying still, a quarter of splitting into 2, and a quarter of splitting into 3. What is the probability of this species dieing out finally.3 AnswersP(dying out)= \sqrt(2)-1(1+p+p^2+p^3)/4 = p So p = sqrt(2) - 1.For those who like me did not understand where the two results above come from: http://en.wikipedia.org/wiki/Branching_process

### Quantitative Finance at Morgan Stanley was asked...

Jan 28, 2011
 Starting at 0.0.0 going to 3.3.3 and you can only move right, up or forward. How many paths are there to 3.3.3?1 Answer9!/(3!3!3!)

### Quantitative Finance at Morgan Stanley was asked...

May 31, 2017
 regression in detailBe the first to answer this question

### Quantitative Finance Analyst at Bank of America was asked...

Dec 22, 2015
 How do you forecast deposits? What distribution do you assume?Be the first to answer this question

Aug 12, 2015