Chapter 1
General Principles

Let us begin this book by exploring five general principles that will be extremely helpful in your interview process. From my experience on both sides of the interview table, these general guidelines will better prepare you for job interviews and will likely make you a successful candidate.

1. Build a broad knowledge base

The length and the style of quant interviews differ from firm to firm. Landing a quant job may mean enduring hours of bombardment with brain teaser, calculus, linear algebra, probability theory, statistics, derivative pricing, or programming problems. To be a successful candidate, you need to have broad knowledge in mathematics, finance and programming.

Will all these topics be relevant for your future quant job? Probably not. Each specific quant position often requires only limited knowledge in these domains. General problem solving skills may make more difference than specific knowledge. Then why are quantitative interviews so comprehensive? There are at least two reasons for this:

The first reason is that interviewers often have diverse backgrounds. Each interviewer has his or her own favorite topics that are often related to his or her own educational background or work experience. As a result, the topics you will be tested on are likely to be very broad. The second reason is more fundamental. Your problem solving skills—a crucial requirement for any quant job—is often positively correlated to the breadth of your knowledge. A basic understanding of a broad range of topics often helps you better analyze problems, explore alternative approaches, and come up with efficient solutions. Besides, your responsibility may not be restricted to your own projects. You will be expected to contribute as a member of a bigger team. Having broad knowledge will help you contribute to the team’s success as well.

The key here is “basic understanding.” Interviewers do not expect you to be an expert on a specific subject—unless it happens to be your PhD thesis. The knowledge used in interviews, although broad, covers mainly essential concepts. This is exactly the reason why most of the books I refer to in the following chapters have the word “introduction” or “first” in the title. If I am allowed to give only one suggestion to a candidate, it will be know the basics very well.

2. Practice your interview skills

The interview process starts long before you step into an interview room. In a sense, the success or failure of your interview is often determined before the first question is asked. Your solutions to interview problems may fail to reflect your true intelligence and 2 knowledge if you are unprepared. Although a complete review of quant interview problems is impossible and unnecessary, practice does improve your interview skills. Furthermore, many of the behavioral, technical and resume-related questions can be anticipated. So prepare yourself for potential questions long before you enter an interview room.

3. Listen carefully

You should be an active listener in interviews so that you understand the problems well before you attempt to answer them. If any aspect of a problem is not clear to you, politely ask for clarification. If the problem is more than a couple of sentences, jot down the key words to help you remember all the information. For complex problems, interviewers often give away some clues when they explain the problem. Even the assumptions they give may include some information as to how to approach the problem. So listen carefully and make sure you get the necessary information.

4. Speak your mind

When you analyze a problem and explore different ways to solve it, never do it silently. Clearly demonstrate your analysis and write down the important steps involved if necessary. This conveys your intelligence to the interviewer and shows that you are methodical and thorough. In case that you go astray, the interaction will also give your interviewer the opportunity to correct the course and provide you with some hints.

Speaking your mind does not mean explaining every tiny detail. If some conclusions are obvious to you, simply state the conclusion without the trivial details. More often than not, the interviewer uses a problem to test a specific concept/approach. You should focus on demonstrating your understanding of the key concept/approach instead of dwelling on less relevant details.

5. Make reasonable assumptions

In real job settings, you are unlikely to have all the necessary information or data you’d prefer to have before you build a model and make a decision. In interviews, interviewers may not give you all the necessary assumptions either. So it is up to you to make reasonable assumptions. The keyword here is reasonable. Explain your assumptions to the interviewer so that you will get immediate feedback. To solve quantitative problems, it is crucial that you can quickly make reasonable assumptions and design appropriate frameworks to solve problems based on the assumptions.