Heard on the Street: Quantitative Questions from Wall Street Job Interviews

Product Information

Equity ETFs are often supported by a plethora of market-makers and APs, but bond ETFs are more specialised, with a narrower club dominating activity. Some analysts and investors have long fretted what would happen if an accident were to befall one of the bigger players. “If you think the fixed income ETF market is systemically important, then Jane Street is systemically important,” says the one-time rival. They obviously have a lot of smart technologists, but in their DNA they are really traders,” says a one-time rival. “Many market-makers are very technology-driven, but Jane Street is a trader-driven firm. Jane’s niche is that they will price less liquid ETFs better than anyone.” This document was uploaded by our user. The uploader already confirmed that they had the permission to publish

Advance Auto Parts stomped on the gas pedal and, instead of accelerating, flooded the engine. Since former PepsiCo executive Tom Greco took over in April 2016, and especially the past few years, the retailer has been notable for struggling in a hot retail category. Its shares have lagged behind rivals O’Reilly Automotive and AutoZone by 300 and 270 percentage points, respectively, and have shed more than half of their value during his tenure. A year ago, the world seemed oblivious to signs that a novel virus outbreak in China was a serious, global threat. But one of Wall Street’s biggest but most secretive money machines saw the debacle coming and battened down the hatches. This wasn’t an ETF liquidity story,” says Matt Berger, head of bond trading at Jane Street. “It was liquidity drying up in the underlying fixed income markets.”Nonetheless, the events of 2020 highlight just how big and influential the growing bond ETF universe is, and how vitally important firms like Jane Street are to their functioning. And that has some downsides. Banks of all sizes are more reluctant to lend, with overall loan growth lagging far behind the long-term average pace. Photo: Clarissa Bonet for The Wall Street Journal The revised 24th edition contains 242 quantitative questions collected from actual job interviews in investment banking, investment management, and options trading. The interviewers use the same questions year-after-year, and here they are with detailed solutions! This edition also includes 267 non-quantitative actual interview questions, giving a total of more than 500 actual finance job interview questions. Starting with the 22nd edition, questions that appeared in (or are likely to appear in) traditional corporate finance job interviews are indicated with a bank symbol in the margin (71 of the quant questions and 192 of the non-quant questions). This makes it easier for corporate finance candidates to go directly to the questions most relevant to them. Most of these questions also appeared in capital markets interviews and quant interviews. So, they should not be skipped over by capital markets or quant candidates unless they are obviously irrelevant. Jane Street’s executives say they are well aware of the implications. “We know we are an important part of the efficiency of many of these markets, and that’s something that we feel a huge responsibility for and take very seriously,” Mr Berger says.

One way for American banks to offset the pressure coming from rising deposit costs would be to boost business: More loans, even if earning less individually, could still lead to overall revenue growth. That extra confidence paid off handsomely when markets were thrown into a tailspin last March, and bond ETFs emerged as a major faultline. Some sceptics argue that only the Federal Reserve’s extraordinary stimulus prevented a disaster for fixed income ETFs, and remain convinced that they could still prove fragile.Even Charles Schwab, the founder of his eponymous brokerage and once a sceptic of the new breed of higher-speed, modern market-makers like Jane Street, has grown more appreciative of the role they play. “They provide an essential service to the marketplace,” Mr Schwab says. “They provide liquidity by both buying and selling, which is crucially important. You could see the results when markets took a deep dive in March of last year.” While almost every trading desk enjoyed a trading bonanza in 2020, Jane Street’s first-half revenues were equivalent to one-seventh of the combined fixed income, commodities and currency trading revenues of all the world’s biggest banks over the same period, according to research group Coalition. It was more than twice the reported earnings of Citadel Securities, the formidable market-maker owned by hedge fund magnate Ken Griffin. The revised 22nd edition contains 239 quantitative questions collected from actual job interviews in investment banking, investment management, and options trading. The interviewers use the same questions year-after-year, and here they are with detailed solutions! This edition also includes 264 non-quantitative actual interview questions, giving a total of more than 500 actual finance job interview questions.