Quantitative Finance Analyst Interviews

Quantitative Finance Analyst Interview Questions


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Morgan Stanley
Quantitative Finance Summer Associate was asked...5 August 2010

At a party everyone shakes hands, 66 hand shakes occur, how many people are at the party?

9 Answers


You 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. Less

n(n-1)/2=66 so n=12

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Morgan Stanley

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?

5 Answers

17/44 of the stock with variance of .3 and 27/44 from the stock with variance of .2 Less

No, if you can short, the variance could be reduced even further since the stocks are correlated. Less

Above answers used variance in portfolio variance equation, rather than std. Answer is .386 for security with var .3, and .613 for security with var .2 Less

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Morgan Stanley

A use 5 hours finish a job. B use 8 hours finish it. How long A and B take it together?

4 Answers

I mean it is not correct (but probably I do not have got true): 1 hour A can make 20% (1/5) B can make 12.5% (1/8) A+B can make 32.5% (1/5 + 1/8 = 13/40) The work will be finished at 100% (1) 1 hour - 32.5% (13/40) x hour - 100% (1) x = 1*1/(13/40) = 40/13 = 3.077 (hours) tha half of the equation was good, but: 8 = X + 1.6*X = 2.6X; -> x=8/2.6) Please post a comment if I do not have true!!! Less



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The Profs Tuition

What kind of subjects are you looking to teach?

4 Answers

I detailed my CV and what relevant subjects I could teach. Also went through my demo. Less

I wanted to teach Urdu

To implementing the policies and plans developed by the top managers

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Morgan Stanley

If W is standard Brownian Motion, for what values of n is W^n still a martingale?

3 Answers

By Ito W^n is a martingale for n=0,1

Xt 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. Less

Agree, for any n>1 you get a drift term

Morgan Stanley

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 Answers


sorry, should be 25/3


Morgan Stanley

Evaluate the integral from 0 to pi/6 of sec(x) dx.

3 Answers

ln(root 3)


Reaching back to high school, I'd say -.5

Morgan Stanley

Each timestep an Amoeba can produce 0,1,2 offspring or it can die with equal probability for each event (1/4 each). What is the probability that the population can survive indefinitely?

2 Answers


0: it is an undercritical process.

Morgan Stanley

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.

2 Answers

(1+p+p^2+p^3)/4 = p So p = sqrt(2) - 1.

P(dying out)= \sqrt(2)-1

Bank of America

Tell me about yourself and go through your resume. Give me an example how you accomplish a teamwork for achievement. What is p-value and how do you interpret it to your grandma?

1 Answers

It's not very hard.

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