Define free cash flow.
Define EVA.
How do you measure Return on Invested Capital?
What is the difference (and advantages/disadvantages) between purchase and pooling accounting methods?
What do you think about the market?/Talk to me about the stock market.
Tell me about some investment books you’ve read lately.
Fixed Income
Graph the price yield relationship of bonds.
What is duration/Macaulry duration/Modified duration? Show me.
What is convexity?
The following are prices of four different bonds: 25, 23, 22, 24. Assuming that you can sell or buy these bonds at no cost, if you know that tomorrow, three of them will go to 0 and one of them, 100, how would you arbitrage? (buy them all)
How would you explain credit spread?
Currency - Foreign Exchange
If the yen/dollar exchange rate is 100yen/$ today and the one year forward rate is 105yen/$, what does this imply?
One plus one half plus one fourth plus one eighth . . . gets closer to a certain number. What is the number and why?
What is the yen/dollar exchange rate today? Where do you think it will be in one year and why?
(After knowing that the interviewee knows the basics of options) If an exporting company wants to pay no more than 110 yen to a dollar and no less than 90 yen to a dollar in 3 months, how would you use option instruments to hedge their position?
Would a price of a call option go up or down when the maturity of the option is longer?
(After knowing that the interviewee took econometrics) What is econometrics? Could you go through the calculation to do regression analysis?
Investment Management
(for fixed income) What does the yield curve look like today and what would be your investment strategy? Valuation questions (look under investment banking)
Tell me about your own portfolio. What is your investment strategy? (answer in technical terms)
If you are given a market or an industry, what would be the steps to evaluate them?
Sales and Trading
What are the qualifications needed to be a good salesman?
How would you make a customer like you even if you don’t like them?
General
What is the Dow Jones today?
What is the Federal Fund rate today?
What is the 30-year T-bond rate today?
Give me a business idea.
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