The considerable gap arises because Wall Street interviewers must separate the ``wolves'' from the ``sheep.'' The sheep are confined by the boundaries of their MBA education; the wolves are not. The interview questions reach beyond these boundaries in order to separate the two classes of interviewees. Hence the gap.
Of course, most interviewers are wolves. Unfortunately, many interviewees are sheep. The butchering that takes place has been described to me as ``horrific.'' That's why you need this book.
I bridge the above-mentioned gap by presenting over one hundred quantitative questions from actual Wall street job interviews (not one of these questions is in any of the three-dozen other interview books in your local book store). The solutions and advice accompanying the questions are carefully designed to sharpen your quantitative skills. My advice is based on many years experience as a front line teaching assistant for MBA students at MIT.
My intended audience includes: interviewees (wolves and sheep alike) seeking employment at Wall Street or other finance-related firms; interviewers at Wall Street or other finance-related firms (who need to weed out hapless sheep); university professors who want to ``spice up'' finance courses with Wall Street job interview questions (both for fun and to show the importance of the basic concepts on The Street); university students studying finance who want to fill in the gaps in their course work; and finally, doctoral students in financial economics who desperately need entertainment during periods of down-time.
Many of the questions collected and presented here are ``classics'' that appear year-after-year without fail. However, this book is definitely not for people who just want ``The Answers'' to such questions. Such people are the archetypical sheep in wolves' clothing, and they are quickly identified as such in an interview.
To benefit from this book, you must make a serious investment of your time in studying the questions, my suggested solutions, and the appendices. As a prerequisite, I expect you to have completed the traditional introductory courses in option pricing and financial economics (or equivalent independent study). See the introductory chapter for an overview of the contents, and for warnings and advice.
I thank MIT students, MIT faculty, and people ``on The Street'' who
have supplied me with information. I thank Olivier Ledoit, Cecily
Lown, Bingjian Ni, Eva Porro, and Juan Tenorio for their constructive
criticism. This book was written and edited in 1995 while commuting to
and from MIT on the subways and buses of the Massachusetts Bay Transit
Authority (MBTA).
TFC
MIT
1995
I updated this book while working as a professor at Indiana University
(IU). I owe a vote of thanks to many of the same people thanked above
(especially Olivier Ledoit). In addition, I thank Sean Curry and The
MathWorks Inc for a complimentary copy of the
outstanding software package MATLAB (with which all
complex answers were checked, and all figures were drawn). I also thank
Andres Almazan, Mary Chris Bates, Taras Klymchuk,
Alan J. Marcus, Marc Rakotomalala, Dahn Tamir,
and students (MBA and undergraduate) at each of MIT, UCLA, and IU.
TFC
IU
1997, 1998