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3,245 portfolio manager interview questions shared by candidates

I'll give an example of how ridiculous the questions became. The hiring manager asked me to describe beta. I told him the mathematical equation and explained variance/covariance. He said great, but what is beta. I told him the interpretation of beta, being a measure of volatility and systemic risk, etc. He said great, but what is beta. So I explained the mathematical interpretation, eg 1.4 is 40% more volatile than market. He said great, but what is beta. I then spoke about the limitations of beta, how it's a function of volatility but not a function for potential losses, as in a stock can be in a strong downtrend with a low beta, but you can lose large sums of money, which ultimately matters more to investors. He said no, I want you to tell me what beta is. Finally, in exhaustion, I had to ask him what he wanted from me basically. He then drew a y and x axis on a piece of paper, placed some dots, and asked me to draw beta. I paused for a minute or so, and eventually just drew a line through the dots (a simple linear regression). He asked me the equation, to which I replied y=mx+b, and asked me to talk about alpha and beta. Clearly I had just at length described beta accurately, and knew that alpha were the excess returns. But, again, I had not looked at this kind of textbook example in years, if ever. I guess I bombed this part, as he had to essentially give me the solution, which was merely beta was the slope (m) and b was alpha (the y intercept). He then advised me to take a quant finance certification program (a program he had completed), despite the fact that my college education was partially in quant finance. Google image search for his alpha beta graph and you'll find it in less than 10 seconds. Again, every line of questioning was like this -- boiling down every intelligent thought into what felt like an Econ 101 course. Now I ask you: what does this have to practically do with the role's responsibilities of being a portfolio analyst, in which you speak to customers about their portfolio's performance.
avatar

Portfolio Analyst

Interviewed at Bank Leumi USA

3.8★
May 24, 2019

I'll give an example of how ridiculous the questions became. The hiring manager asked me to describe beta. I told him the mathematical equation and explained variance/covariance. He said great, but what is beta. I told him the interpretation of beta, being a measure of volatility and systemic risk, etc. He said great, but what is beta. So I explained the mathematical interpretation, eg 1.4 is 40% more volatile than market. He said great, but what is beta. I then spoke about the limitations of beta, how it's a function of volatility but not a function for potential losses, as in a stock can be in a strong downtrend with a low beta, but you can lose large sums of money, which ultimately matters more to investors. He said no, I want you to tell me what beta is. Finally, in exhaustion, I had to ask him what he wanted from me basically. He then drew a y and x axis on a piece of paper, placed some dots, and asked me to draw beta. I paused for a minute or so, and eventually just drew a line through the dots (a simple linear regression). He asked me the equation, to which I replied y=mx+b, and asked me to talk about alpha and beta. Clearly I had just at length described beta accurately, and knew that alpha were the excess returns. But, again, I had not looked at this kind of textbook example in years, if ever. I guess I bombed this part, as he had to essentially give me the solution, which was merely beta was the slope (m) and b was alpha (the y intercept). He then advised me to take a quant finance certification program (a program he had completed), despite the fact that my college education was partially in quant finance. Google image search for his alpha beta graph and you'll find it in less than 10 seconds. Again, every line of questioning was like this -- boiling down every intelligent thought into what felt like an Econ 101 course. Now I ask you: what does this have to practically do with the role's responsibilities of being a portfolio analyst, in which you speak to customers about their portfolio's performance.

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