150 Most Frequently Asked Questions On Quant Interviews Here
150 Most Frequently Asked Questions on Quant Interviews — Engaging Guide
Part 6: Coding & Algorithms (Questions 106–125)
- Can you explain the concept of behavioral finance?
- How do you calculate the loss aversion of an investor?
- What is the definition of a cognitive bias?
- Can you describe the properties of a prospect theory?
- How do you calculate the reference point of an investor?
- What is the difference between a rational and irrational investor?
- Can you explain the concept of market sentiment?
- How do you calculate the sentiment index of a market?
- What is the definition of a bubble in a financial market?
- Can you describe the properties of a market crash?
- How do you calculate the herding behavior of investors?
- What is the difference between a fundamental and technical analysis?
- Can you explain the concept of noise trading?
- How do you calculate the noise trader sentiment index?
- What is the definition of a sentiment-driven market?
- Can you describe the properties of a sentiment-driven investor?
- How do you calculate the disposition effect of an investor?
- What is the difference between a long-term and short-term investor?
- Can you explain the concept of mental accounting?
- How do you calculate the mental accounting bias of an investor?
System design & production quant systems (10)
- Explain overfitting in tree-based models and how to prevent it.
- Approach: write/read throughput, compression, indexing by time/symbol, columnar vs row storage.
- Tip: consider specialized formats (Parquet) and time-series DBs.
- Describe memory management issues in high-frequency systems.
The Insight:
You are expected to understand the relationship between volatility, time decay (Theta), and the underlying asset price. A common trick question involves intuitive pricing: "If volatility doubles, does the price of the call option double?" (Answer: No, it increases by roughly $\sqrt2$ due to the square root of time rule in volatility scaling). 150 Most Frequently Asked Questions On Quant Interviews
- How do you communicate technical results to non-technical stakeholders?
