We’ve heard that one of the best books to prepare for a “strat” interview at Goldman Sachs is “Heard On The Street: Quantitative Questions from Wall Street Job Interviews” by MIT PhD Timothy Falcon Crack.
Strats — short for strategists — work on trading floors alongside the traders creating models for pricing and risk management, etc.
The job description is similar to that of a quantitative analyst, but quants typically aren’t on the trading floor.
In a recent blog post on the Goldman’s Careers Blog, recruiter Leighton Symons explained that the bank’s strat interview is heavily focused on maths and candidates are also drilled with brainteasers.
“It could be a question on probability theory, partial differential equations, stochastic calculus — or other aspects of maths that are not related to finance,” Leighton Symons said on the blog.
“Heard On The Street” features hundred of quantitative, logic, derivatives, statistics and non-quantitative questions compiled from real Wall Street job interviews. Dr. Crack’s book also has a detailed answer key for how to solve the quantitative questions.
“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 archetypal sheep in wolves’ clothing, and they are quickly identified as such in an interview,” Crack writes in the book’s preface.
There are also a bunch of entertaining anecdotes throughout the text. For example, Dr. Crack explains how one of his students at a Goldman interview was given a pencil and a sheet of paper and asked to draw a picture of himself.
Of course, the book isn’t just for those pursuing a career at Goldman. It seems like a great resource for many people pursuing a position at an investment bank or hedge fund.
“While the book is geared towards more technical positions and does involve a fair amount of maths, I would still recommend it even if you are looking for a non-technical position with a hedge fund or an i-bank, since this book contains a lot of brain teasers and logical questions that are commonly asked in all finance interviews to test how well you can think on your feet and under time pressure,” reviewer “spaceman” wrote on Amazon.
The book isn’t cheap, though. We were able to get a used 9th edition for about $US35. Some of the newer copies were about $US89 and we saw a few that were over $US100. But hey, if you get the job it’s definitely worth the investment.
We’ve included a few of the sample questions from the book below:
Non-Quantitative Questions (Thinking Questions)
“How many elevators (i.e. ‘lifts’ if you are British) are there in the US?”
“How many ping-pong balls can you fit in a jumbo jet (e.g., Boeing 747)?”
“How would you move Mount Fuji?”
“Why are manhole covers round?”
Purely Quantitative & Logic Questions
“Why are images in a mirror flipped horizontally and not vertically? For example, although I wear my wristwatch on my left wrist, and my reflections wears his on his right wrist, my reflection is not standing on his head.”
“What is the sum of the integers from 1 to 100?”
“Your bedroom sock drawer contains eight red socks and 11 blue socks that are otherwise identical. The light is broken in your bedroom, and you must select your socks in the dark. What is the minimum number of socks you need to take out of your drawer and carry into your (well-lit) living room to guarantee that you have with you at least a matching pair to choose from?”
“A snail is climbing up a 10-foot pole. It climbs up by three feet every day. Each night it sleeps. While sleeping, it slides down by one foot. When does it reach the top of the pole?”
“You are given eight balls. They appear identical, but one is heavier than the rest. …you have a pair of scales. How do you find the heavy ball?
“This is an absolute classic. A king demands a tax of 1,000 gold sovereigns from each of 10 regions of his nation. The tax collectors for each region bring him the requested bag of gold coins at the year end.An informant tells the king that one tax collector is cheating and giving coins that are consistently 10% lighter than they should be, but he does not know which collector is cheating. The king knows that each coin should weigh exactly one ounce. How can the king identify the cheat by using a weighing device exactly once?”