EDHEC Master Career Center

FOCUS GROUP
Sales / Trading / Structuring
Interview Questions
Vast Range of Opportunities
Vast Range of Opportunities
 Anticipate All Relevant Questions

1. Understanding of the job & its context

- Job description word by word
- Objectives of the job / desk / department
- Business model
- Products / Services
- Market : offer & demand & specificities
- News
- Current prices of products / benchmarks & reasons / evolution
- CLIENTS AND THEIR NEEDS
- Interaction with other functions
- Regulation

2. Definitions of technical terms & concepts

- All terms and concepts relevant to the position / sector
 Anticipate All Relevant Questions

3. Formulas, calculations & brainteasers

- What is the price / value of the product / asset and how to calculate it ?
- Depending on the product / asset what variables and / or discount rates
do you use for the valuation and why and how do you calculate them ?
- What are macro- / micro- economic, political, regulatory and other drivers /
influences for the value of the product / asset and how to price them in ?
- How does the price / value of the product / asset compare with comparable
products / assets, benchmarks, markets ?
- What are appropriate risk / performance / risk-adjusted performance
measures ?
- Brainteasers such as :
There are 4 famous paintings in a museum : a scenery, a kitchen, a park
and oranges. The painters were : Jones, Smith, Hardy, Lane. The scenery
hangs next to Smith’s painting. The scenery also hangs between the park
and Hardy’s painting. Jones didn’t paint the scenery nor the oranges. Who
painted the kitchen ? (Hardy)
 Sales Interview Questions
1. Understanding of the job & its context
Across all asset classes e.g. :
- What is the difference between sellside & buyside ?
- What is the difference between cash vs. derivative vs. exotic instruments ?
- What is the difference between primary and secondary market ?
- Sell me one of our assets / products (stock / bond / autocall / …).
- How much do you expect your P&L to be in your first year? After 5 years ?
- What are the different types of HF? What is an event driven hedge fund ?
- What is the latest newsflow concerning the activity ?
- What is the level of the Euro vs the USD ? Brent ? Gold ?
- Rank a list of economic indicators (such as new home sales, business sentiment,
falling US central bank rates, etc.) according to the importance of their influence
on the financial market orientation.
- What are the impacts of MIFID 2 on our business ?
E.g. for funds :
- Give us 4 different types of strategies in portfolio management ?
- What is an index ?
- What is Smart Beta ?
 Sales Interview Questions
1. Understanding of the job & its context
E.g. for Equity :
- Pitch me a stock ? Do you think it is over- / under- valued vs. its competitors ?
What do you consider its fair value ? What is the upside ? Downside risks ?
- What is the level of the Eurostoxx50 ? Its PE multiple ? How has it evolved since
the start of the year ? Are equities overpriced ?
- If the FED lowers its rates, does it have a positive impact on equity ? Why ?
E.g. for Fixed Income & Rates :
- What types of fixed income instruments do you know ?
- Where is the LIBOR (3M) at and what was the LIBOR scandal about ?
E.g. for Commodities :
- What do you know about the specificities of our market ?
- What is the difference between the Brent and the WTI ? Where are their futures
traded ?
E.g. for Derivatives :
- What is a termsheets and what information does it contain ?
- Name some Delta One products ?
 Sales Interview Questions
2. Definitions of technical terms & concepts
Across all asset classes e.g. :
- What is OTC (vs exchange traded) ?
- What is an ETF ? What is the difference between an ETF and a mutual fund ?
E.g. for funds :
- What is Net Asset Value ? Sharpe ratio ? Alpha ? Beta ? Max. Drawdown ?
E.g. for Equity :
- What is the difference between active and passive investing ?
- What are Long/Short Strategies ?
E.g. for Fixed Income :
- What is an inflation linked bond?
- What is a Z spread? Asset Swap Spread? TED spread?
- What is a repo?
E.g. for commodities :
- What is carry ?
- What is backwardation ?
- What is contango ?
 Sales Interview Questions

2. Definitions of technical terms & concepts

E.g. for Derivatives :
- Define the put-call parity ?
- What are the options Greeks ?
- What is the meaning of a delta of 70% for a call option ?
- What is the difference between historical and implied volatility ?
- What is the volatility smile ? Draw it for a stock and for a commodity ?
- What are the most common hedging strategies ?
- What is a CFD ?
- What is a margin call ?
- What is the VIX ?
- What are Plain Vanilla Derivatives – give examples ?
- Give examples of exotic options ?
- Give examples of combinations ?
- What are option spreads – give examples ?
 Sales Interview Questions

3. Formulas, calculations & brainteasers

Eg. For equities :
- How would you value a stock ?
- How would you value a company which was very successful until recently, but
lost market share due to a single event?
- Run me through a DCF ?
E.g. for fixed income :
- What is the PV of a zero coupon bond 100%, 5Y maturity, 5Y rate 3% ?
E.g. for derivatives :
- Give examples of derivatives and their pricing ? How do you price an option ?
- Give me the Black-Scholes formula? Explain the assumptions behind B & S ?
- Provide the formulas for the Greeks ?
- What is the impact of volatility on option pricing?
- What is the impact of passing time on option pricing ?
- Draw the payoff of a put option (long and short) ?
- What is the payoff of a Straddle? Strangle? Condor?
 Sales Interview Questions

Example Job & Questions

Léa Reubeuze (MiM / MSc in Financial Markets)

BNP Paribas Paris, 6M Internship as Structured Products Sales Assistant

 Coverage of : Spain, Finland, Sweden, Norway, Luxembourg and France

 Pricing of equity structured products for clients (Autocallable, Airbag, Twin
win, Reverse Convertible)
 Support for sales in customer relations (clients training on pricing platform,
order confirmations, follow-up)
 Providing a link between Trading, Structuring desks, Legal, Middle Office
and Back Office
 Trading Interview Questions

1. Understanding of the job & its context

- How do you make money on a trade?
- Is it OK to lose money on a particular trading strategy?
- How much do you expect your P&L to be in your first year? After 5 years?
- What’s happening to market volatility and why?
- How can you predict trends ?
- Where do you see the S&P500 going over the next 6M ?
- What do you know about trade reporting ?

- Do you like making decisions in a split second?

- Are you risk adverse?
- Are you confident you can bet against the market and win?
- What do you think of prop trading?
- What do you think happened in the Kerviel case?
- What do you think about the previous ban on naked CDS trading?
 Trading Interview Questions

2. Definitions of technical terms & concepts

- What is fundamental analysis ? What is technical analysis ? Give examples
?
- What is Execution Trading ? Prop Trading ? Algorithmic trading? High
Frequency Trading?

3. Formulas, calculations & brainteasers

- What is the difference between VWAP and a Simple Moving Average ?
- What is the sensitivity of an instrument (e.g. bond) to a certain event (e.g.
increase in US interest rates) ?
- What is 47 x 5 ? (= (40 x 5) + (7 x 5) = 200 + 35 = 235)
- Give us a trading idea ?
- How can you arrive at at position that is both gamma and theta positive ?
- What is your coding experience ?

 See also Sales Interview Questions

 Trading Interview Questions

Example Job & Questions

Marieke Debroucker (MiM & MsC Finance)

Barclays, London, Summer Internship

 Repo Trading Summer Analyst

 Determine the link between ECB TLTRO operations and the value of
unsecured and secured rates since 2015.
 Building a historical trend of EGB auctions and correlate that with GC
supply/demand traded via screens.
 Delta One Trading Summer Analyst
 Completion of fundamental dividend research and trading strategy.
 Production of an EFP Roll Pricer in order to solve for the repo rates and
identify arbitrage possibility.
 Structuring Interview Questions
1. Understanding of the job & its context
- What are structured products and what types of structured products do you
know ?
- What set off the last financial crisis ?
2. Definitions of technical terms & concepts
- What is Backtesting ?
- Give examples of equity structured products and their functioning ?
- What are Discount and Bonus Certificates ?
- What are Asset-backed securities (ABS) ?
- What is factor investing ?
3. Formulas, calculations & brainteasers
- Which structured equity product would you issue in the current market
conditions and why ?
- How could you short the implicit volatility ?
- How do you price a digital / cash or nothing call (assuming non dividends) ?
- And again importantly : What is your coding experience ?
 See also Sales Interview Questions
 Structuring Interview Questions

3. Formulas, calculations & brainteasers

Example from BNPP equities & commodity derivatives test :
Jessy believes that the Apple Inc. stock price will drop in the next 6 months.
Today, September 20, 2013, the stock price is USD 475.
Jessy purchases 500 put options giving him the right to sell Apple Inc. stock at
USD 475 in 6 months, on March 20, 2014.
The characteristics of these options are :
• Parity or entitlement ratio (i.e. the number of options required to sell one
share) : 5
• Price of each put option : USD 9,50
On March 20, 2014, the stock price is USD 405 > Jessy exercises his option.
Ignoring time value of money, what performance return relative to his initial
investment of September 20, 2013 did Jessy make on these transactions (in %
rounded to 1 decimal) ? (47,4%)
 Structuring Interview Questions

Example Job & Questions

Benedict Vogt (MSc Financial Markets, Major in Trading)

Deutsche Bank AG Frankfurt, 6M Internship in Equities Structuring

 Backtest and compute sensitivity analysis for Risk Premia Portfolios as well
as Custom Baskets for Long/Short Strategies and Gap Puts
 Price Equity-Linked Notes, Structured Products and Plain Vanilla Derivatives
 Develop termsheets for structured transactions (Excess Return Swaps for
Risk Premia Indices, structured “Namensschuldverschreibung” and OTC
Derivatives)
 Universal Advise
- To prepare ideally try to find the current intern or someone on the desk who is
willing to answer some smart questions.
- Arrive for the interview early and with the right look.
- Bring your application materials and writing pad & pen.
- Put on your best behavior, have a firm handshake and a good posture, make eye
contact, remember and use people’s names, listen actively and say “thank you”.
- Use professional language / technical terms and the key words from the job ad.
- Take a couple of seconds to plan your answer and if in doubt repeat the question
back to the interviewer out loud.
- Have a structured approach to answering each question, be short and precise
and go from general to specific or divide your answer up into up to 3 points
(people can’t remember more).
- Remain calm and composed and do not be upset if there is some area covered
in an interview question that you’ve never been exposed to. Demonstrate your
line of reasoning and state the things / concepts you do know that are relevant
and how you’d use them to solve the problem.
- Foresee some intelligent questions to ask the interviewer and don’t forget to
follow up with a thank you note !
Questions / Answers & Feedback

kerstin.fischer@edhec.edu