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Hedge Fund Interview Questions

February 25, 2012 | Comments: 0 | Views: 142

A hedge fund interview can be very stressful. You never know what to expect, but there are three main areas an interviewer will likely focus on: behavioral questions, technical questions, and case study.

The behavioral questions you will get asked are similar to other finance behavioral questions. The interviewer is trying to get to know who you are as a person. The interviewer is trying to figure out if you "fit in," or if people at the firm will get along with you. You will be asked questions like "walk me through your resume," or "tell me about your deal experience." The behavioral questions typically get asked in the first round, where you will likely meet with either the portfolio manager and/or a senior analyst.

Technical questions start to get a bit more difficult. The questions won't be as targeted as an investment banking interview, but the interviewer will still be testing you to determine your accounting skills and financial modeling skills. The range of technical questions vary, but will likely focus on accounting, corporate finance, excel, and financial modeling.

The hedge fund case study is the meat of the interview, and by far carries the most weight in determining whether you are going to get an offer. A hedge fund case study will be assigned by the interviewer as a "take home test." The good news is if you are given a case study it almost assures you another interview, but the bad news the case study is going to require a lot of work.

Hedge Fund Case Study Example: Give an investment opinion on Home DepotStep 1: Read the latest 10K, last 2 10Q's, last 2 press releases, last 2 earnings releases. All of these materials can be found on the company's website or at the SEC's website.

Step 2: Build a Financial Model: This will be difficult if you have never built a financial model before, but you need to build an income statement, balance sheet, and cash flow statement, and make sure all three statements link and balance properly. You will need to project out at least two years

Step 3. Form an Investment Opinion: The goal is to figure out if you think the stock is a buy or a sell. If you think the stock is a buy, you need to show why the valuation is cheap, and why the earnings are going higher. If you think the stock is a sell, you need to show why the valuation is expensive, and why the earnings won't be as high as the consensus expects.

In conclusion, study the three type of common hedge fund interview questions and you improve your odds of interview success!

Evan Lebowitz writes about a variety of topics including hedge fund interview, hedge fund case studies and hedge fund recruiting

Source: EzineArticles
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Hedge Fund Interview Questions

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