Heard on the Street: Quantitative Questions from Wall Street Job Interviews

Product Information

If an ETF trades above the value of its assets, APs buy the underlying securities that match the ETF and use them to create new shares to sell to investors. When ETFs fall below the value of their assets, they instead redeem shares for a proportional slice of the underlying portfolio and then sell them. Mostly this continuous arbitrage doesn’t actually require the ETF itself to buy or sell anything and keeps it trading in line with its index. Police Investigate School Bus Shooting; City Clears Encampment From Which Shots Were Allegedly Fired

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by Our basic service, standing ready to buy and sell ETFs, options and bonds, is even more critical in times of stress,” says Josh Kulkin, one of its top traders. “Because we bought all that extra protection we didn’t have to worry about the extreme moves, and were prepared to provide liquidity in an outsized way.” Jane Street’s executives say they are well aware of the implications. “We know we are an important part of the efficiency of many of these markets, and that’s something that we feel a huge responsibility for and take very seriously,” Mr Berger says. Banks of all sizes are more reluctant to lend, with overall loan growth lagging far behind the long-term average pace. Photo: Clarissa Bonet for The Wall Street Journal

That extra confidence paid off handsomely when markets were thrown into a tailspin last March, and bond ETFs emerged as a major faultline. Some sceptics argue that only the Federal Reserve’s extraordinary stimulus prevented a disaster for fixed income ETFs, and remain convinced that they could still prove fragile.

One way for American banks to offset the pressure coming from rising deposit costs would be to boost business: More loans, even if earning less individually, could still lead to overall revenue growth. Stephen Wilmot is an editor of The Wall Street Journal's Heard on the Street column, based in London. In addition to editing, he writes columns about car makers, often focused on the impact of electric vehicles on automotive strategy and on the case for investing in companies like General Motors, Tesla and Volkswagen. However, a fire sale by investors desperate to raise cash hit bond trading in March. That meant APs struggled to narrow the widening dislocations between the fast-sliding prices of bond ETFs and the lagging value of their assets, simply because they had trouble selling the underlying bonds. They obviously have a lot of smart technologists, but in their DNA they are really traders,” says a one-time rival. “Many market-makers are very technology-driven, but Jane Street is a trader-driven firm. Jane’s niche is that they will price less liquid ETFs better than anyone.” He has previously written commentary on a wide range of companies for Heard on the Street, including airlines, real estate companies and luxury goods makers.

It’s that time of year again: alternate-side winter parking regulations begin Nov. 15. The object is to have residents park in a way that allows the Department of Public Works to clear each side of the street from snow and slush during winter. The regulation calls for all cars to be parked on the correct side of the street from midnight to 5 p.m. as indicated by building numbers in relation to the calendar days. For example, odd-numbered calendar days call for parking on odd sides of the street and even-numbered calendar days call for parking on even numbered sides of the street. The transition period to move your vehicle is from 5 p.m. to 11:59 p.m. No parking is allowed downtown from 1 a.m. through 6:59 a.m. He previously wrote Ahead of the Tape for the Journal and the Lex column for the Financial Times. He was an analyst and later director of Emerging Europe, Middle East and Africa Equity Research at Credit Suisse. We think of ourselves as mainly built for crises,” says Rob Granieri, one of the company’s founders. Nonetheless, Mr Granieri insists there is little triumphalism at Jane Street. “I still walk in every day thinking that we’re still struggling to survive,” he admits. Jane Street traders in New York offices. The company’s forte is lubricating trading in exchange traded funds and other markets Liquidity warning Starting with the 22nd edition, questions that appeared in (or are likely to appear in) traditional corporate finance job interviews are indicated with a bank symbol in the margin (71 of the quant questions and 192 of the non-quant questions). This makes it easier for corporate finance candidates to go directly to the questions most relevant to them. Most of these questions also appeared in capital markets interviews and quant interviews. So, they should not be skipped over by capital markets or quant candidates unless they are obviously irrelevant. This wasn’t an ETF liquidity story,” says Matt Berger, head of bond trading at Jane Street. “It was liquidity drying up in the underlying fixed income markets.”

A year ago, the world seemed oblivious to signs that a novel virus outbreak in China was a serious, global threat. But one of Wall Street’s biggest but most secretive money machines saw the debacle coming and battened down the hatches.While almost every trading desk enjoyed a trading bonanza in 2020, Jane Street’s first-half revenues were equivalent to one-seventh of the combined fixed income, commodities and currency trading revenues of all the world’s biggest banks over the same period, according to research group Coalition. It was more than twice the reported earnings of Citadel Securities, the formidable market-maker owned by hedge fund magnate Ken Griffin. Questions that appeared in (or are likely to appear in) traditional corporate finance job interviews are indicated with a bank symbol in the margin (72 of the 242 quant questions and 196 of the 267 non-quant questions). This makes it easier for corporate finance candidates to go directly to the questions most relevant to them. Most of these questions also appeared in capital markets interviews and quant interviews. So, they should not be skipped over by capital markets or quant candidates unless they are obviously irrelevant. Tim Reynolds, Michael Jenkins, Mr Granieri and Mr Gerstein were soon joined by a medley of traders and coders, such as Yaron Minsky, who convinced the firm to adopt OCaml as its sole programming language. Today, Jane Street’s source code is 25m lines long, about half as much as the Large Hadron Collider uses. These results suggest that market liquidity conditions were resilient in the fixed income ETF market throughout the crisis. Moreover, the results suggest that fixed income ETF prices continued to provide a real-time view of the value of the underlying bonds during the crisis,” BoC said. “In contrast, the net asset value of fixed income ETFs with less liquid holdings provided only a lagged indication of their ‘true’ value due to poor bond trading activity.” Fed thumbs-up Jane Street’s unorthodoxy goes well beyond its programming language. Mr Granieri is the only remaining founder still at the company, but there is no chief executive, hierarchy or even a clear management committee. Instead, Jane Street almost resembles an anarchist commune, informally led by a group of 30 or 40 senior executives. A smattering of titles have been reluctantly adopted in recent years, but internally they are little used and people rotate around the firm to keep things fresh. Few leave.

The revised 22nd edition contains 239 quantitative questions collected from actual job interviews in investment banking, investment management, and options trading. The interviewers use the same questions year-after-year, and here they are with detailed solutions! This edition also includes 264 non-quantitative actual interview questions, giving a total of more than 500 actual finance job interview questions.

Customer reviews

Jane Street is this big, important and growing player that no one’s really heard of,” says Steve Zamsky, previously head of corporate credit trading at Morgan Stanley and now a fund manager at Smith Capital. “They’re sophisticated, quirky and not typical of Wall Street traders.” What now for Wall Street’s least-known trading tycoons? Jane Street made a move into trading directly with investment groups in 2014 — territory historically dominated by big banks. It is now expanding its business in Asia and planning to push more aggressively into equity market options. Even Charles Schwab, the founder of his eponymous brokerage and once a sceptic of the new breed of higher-speed, modern market-makers like Jane Street, has grown more appreciative of the role they play. “They provide an essential service to the marketplace,” Mr Schwab says. “They provide liquidity by both buying and selling, which is crucially important. You could see the results when markets took a deep dive in March of last year.” Nonetheless, the events of 2020 highlight just how big and influential the growing bond ETF universe is, and how vitally important firms like Jane Street are to their functioning. And that has some downsides. The revised 24th edition contains 242 quantitative questions collected from actual job interviews in investment banking, investment management, and options trading. The interviewers use the same questions year-after-year, and here they are with detailed solutions! This edition also includes 267 non-quantitative actual interview questions, giving a total of more than 500 actual finance job interview questions.