Quant Trader Intern Interview Guide for Beginners — Pt.2 First Round
Hi there this is the second post in a series of posts about getting a quant finance internship. I recommend reading the first post if you haven’t already.
Looking for the other posts?
Pt.1: Background (Interview Prep and Organization)
Pt.3: Round 2 (HR Screens and HireViews)
Pt.4: Round 3 (Technical phone screens — Probability, EV, and Brainteasers)
Most quantitative trading firms will have under 2,000 employees. Compared to large banks, big tech firms, or most consulting firms, they’re puny. Thus, they will have significantly less resources compared many other companies you’re mayhave applied to. Therefore, most will employ a test that can be easily scored by a computer to quickly remove many candidates. Luckily, most quant firms have settled on three topics that they will cover on these first rounds.
- Mental Math (Beginner)
- Pattern Recognition / Logical Reasoning
- Probability / EV (Beginner)
The first round is very straightforward to prepare for, and using the process described below, I’ve passed every first round I’ve encountered.
1. Mental Math (Beginner)
In a field that requires computers and automation, it seems unintuitive to test one’s ability to do math in their head. However, the logic seems to be: while not all people who are bad at mental math will be bad candidates, all candidates who are good at mental math will be good candidates. Don’t agree? Tough luck.
On the bright side, this means that a third of the first round for most companies comprise of an ability that can be 100% developed and requires zero higher level mathematics ability.
The best website I’ve found to develop ability in mental math is: https://www.mathtrainer.org/
This website has levels of increasing difficulty to 100. Grind on this site at least until you reach level 81. If you find a problem that you commonly run into that you can’t solve quickly, google is your friend, there are many simple strategies out there for special cases: x 9, x 11, squaring, etc.
Then, start practicing on the sites:
These sites mimic technical interviews much better and should get you interview ready. Usually I’ll spend 30 minutes on one of these sites to warm up for a first round.
2. Pattern Recognition / Logical Reasoning
Unfortunately, there are not nearly as many resources online to prepare for these types of questions, so there’s only going to be general advice here.
- Don’t panic: I’ve had interviews that had over 25 of these and I only got through about 5. You’re not supposed to finish all of them, so don’t get discouraged if you’re not even close to finishing all of them — you’re not supposed to.
- Read all the instructions: This seems fairly straightforward but is so darn crucial. This will give you some insight on whether or not you should skip questions, how to pace yourself, and what the format of the answers will be.
3. Probability
You have to read A Practical Guide to Quantitative Finance Interviews by Xinfeng Zhou. There is not a single other resource for quant interviews that I’ve found to be as comprehensive or as well written. This is god sent.
This book is targeted for full time positions, so don’t feel discouraged if you can’t solve these problems, you’re not expected to at this level. Accordingly, I will only think about a problem for 10 minutes and then read the answer. When reading the answer, it’s important to try to dissect the thought process that arrives at that answer. Imagine the archetypes of questions that would require a similar solution and try to commit that to memory.
The book is a solid read overall, but to prepare just for the first round interview, only a couple chapters are relevant. Here are the chapters and page numbers that are essential.
Chapter 1
Chapter 4.1–4.3 (not including Bayes’ formula)
If there is one topic that you struggle with, make sure to google for more practice problems until probability (especially conditional probability) feels like second nature.
4. EV
In a lot of ways, studying for probability will cover most of the topics required for studying for EV. However, these problems will typically have a higher focus on game themed questions, so it’s important to familiarize yourself with coin flipping and dice questions.
A big EV topic that is often neglected is the idea of a recursive function. Nearly every set of EV problems will have at least of one these.
Q: Expected number of tosses of a fair coin to get three consecutive heads.
In general, if you reach a point where you need to calculate an infinite summation, that means that the problem could be solved using recursion instead.
5. Wrap-Up
Remember that this is an iterative process. Take notes on every question that stumps you and solve it later, so it never happens again. Good luck, stay organized, and do your best!
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Ready for the next step?
Pt.3: Round 2 (HR Screens and HireViews)
Pt.4: Round 3 (Technical phone screens — Probability, EV, and Brainteasers)
