# 525

Finance Accounting Summer Intern interview questions shared by candidates

## Top Interview Questions

Sort: Relevance|Popular|Date
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?

12

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

### You have a Balance Sheet, Income Statement, and a Cash Flow statement. If you could choose two out of the three statements, which two would you choose and why?

You can make the SCF from BS and IS

This is a straight accounting question. You can make Cash Flow from Balance Sheet and Income Statement, so BS and IS is the answer! Less

@hussein: There is only one correct answer, and it is the Balance Sheet and Income Statement. Less

### 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?

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

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

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; -&gt; x=8/2.6) Please post a comment if I do not have true!!! Less

40/13

http://brainteaserbible.com/interview-brainteaser-andy-and-ben-working-together

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

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

Agree, for any n&gt;1 you get a drift term

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

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

ln(root 3)

ln(3)/2

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

### How would you value X company? Calculate FCF, working capital, enterprise value, etc. Does anything strike you as odd about these financial statements? Which? Why?

DCF, transaction comps, trading comps. FCF= NI +D/A -change in net working capital -capex. Working capital = current assets- current liabilities. Enterprise value = market cap + debt - cash + minority interest/pref shares. Less

For FCF ... assuming FCF to the firm, i.e. FCFF, I think the "interest paid" needs to be added back. Working capital, depending upon data given, narrowed down to (Inventories + A/c Receivables - A/c Payables). Less

### What words describes you

How do others describe you

Resilient

### If given \$100 to invest today and you earn 10% the first year, and then reinvest all the money and lose 10% the next year, do you end up with a gain or a loss?

Loss

you have a loss by 1 Rupee

### What do bankers use a a measure to evaluate companies

3 forms of repayment. 1) cash flow from operations, 2) guarantor support, 3) collateral support for repayment upon liquidation. Less

Ebitda

Viewing 1 - 10 of 525 interview questions