What is the Capital Asset Pricing Model (CAPM)? What are its primary underlying assumptions?
A drawer contains 20 black socks and 20 white socks. If you pull socks out at random, what is the minimum number you must pull out to guarantee a matching pair? Combinatorial Puzzles and Counting
(Kadane's Algorithm). Explain time and space complexity.
Quant developers and researchers must code efficiently, often in C++ for performance-critical systems. 150 Most Frequently Asked Questions On Quant Interviews
: Give a real modeling example where it matters. Which models have high bias vs. high variance?
Quant roles increasingly demand programming skills, particularly in Python, C++, and sometimes R or Julia. These questions assess your ability to implement mathematical ideas in code and solve algorithmic problems efficiently.
Imagine a 1D random walk starting at 0. At each step, you move +1positive 1 with probability -1negative 1 with probability . What is the probability of ever hitting -1negative 1 What is the Capital Asset Pricing Model (CAPM)
Normal distribution, central limit theorem (CLT) Q62 - Q63: Uniform distribution and its uses in simulation Q64 - Q65: Exponential distribution – memoryless property Q66 - Q67: Log‑normal distribution – why it is used for stock prices Q68 - Q69: Chi‑squared, t‑distribution, F‑distribution
Before tackling the questions, ensure you have a solid grasp of the core subjects: calculus, linear algebra, probability, statistics, and basic finance. Review your college textbooks or take online courses.
: Urn A contains 5 white and 2 red balls. Urn B contains 3 white and 3 red balls. A ball is drawn from A and placed into B, then a ball is drawn from B and is black. What is the probability the first ball was red? If you pull socks out at random, what
: Compare convergence rates for pricing American options.
Understanding the psychological flaws of market participants and the macro environment provides context to alpha signals.