Goldman Sacs interview questions




    What Goldman Sacs test on :

    Goldman visited our campus for STRATEGIC ANALYST PROFILE. This page has all the research I did before appearing for my interviews (other people's experience), as well as the questions asked from me  (personal experience)

    Written round
    30 MCQ for us in 1.5 hours. Seems like a lot of time, but the questions were tough and took around 6 minutes each. Some were similar to what we get in our BTech mathematics and computing subjective examinations
    • 5 Logical reasoning :had vector spaces and machine learning. Why was this called logical reasoning? I have no idea
    • 10 Quant : pure mathematics: probability ( Central limit theorem, random walk, z variable, various distributions: Bernoulli, Weinberg). The  kind of questions you get in IIT exam + some puzzles (none of the standard ones)
    • 15 Computer science : calculate complexity of best methods to solve a question (algorithm analysis), operating system questions on page faults and multi-level index


    I read on glassdoor.com that  in addition there is one essay titled "Why are you the best fit for Goldman Sachs?" The topic of this essay is common in all campus placements.
    So I prepared for it too, never got to write my speech


    Probability questions :
    1. We are in a junction. p is the probability that at least one car will pass through it within the next 20 minutes. Give me the probability that no car will pass within the next 5 minutes. 
    1. Suppose you toss a fair coin 400 times. What is the probability that you get at least 220 heads? Round your answer to the nearest percent. 
    2. A drunk man walks back with probability p and forward with probability q(=1-p). He is standing on the edge of the cliff, find the probability that he survives
    3. There was a question on maximum likelihood estimate :



    Puzzles asked :

    1. There are 13 red, 15 blue and 17 green butterflies. 2 butterflies of different colors merge and for 2 butterflies of 3rd color (1 red +1 blue=2 green). What color butterflies are left in the end ?
    1. There're 10 steps ahead of rabbit and she can jump 1 step or 2 steps at a time. How many different ways for her to reach to the top. 

    Ans : Basic Recurrance formula F(n) = F(n-1)+ F(n-2) . Expalation : Asume rabbit wants to climb the 10th step , it can either make the jump from 9th step or from 8th step . F(1) = 1 - can take only 1 step F(2) = 2 - can take 2 single steps or just take a 2 step jump . so 2 ways . Solving this recurrence relation should give the result . Time O(n) & Space O(1)



    1. Given N noodles in a bowl and randomly attaching ends. What is the expected number of loops you will have in the end?  


    Ans : You just have to recognize that the number of loops on the nth trial is

    N(n) = 1/( 2n - 1 ) + N(n-1).

    so

    N(k) = 1 + 1/3 + 1/5 + ... + 1/k 




    For  software development profile :
    1. From C there were questions on register , enum etc storage classes.
    2. C++ questions were mostly of class related , inheritance , friend function etc.
    3. SQL:  some queries . Interview had the question :
    Ways to Improve SQL Query Performance
    Make sure the tables are normalized to the appropriate degree, then that they're indexed correctly. Those are foundational. From there, improvements can normally only come in the 5-10% range



    Expect questions on coding applications in finance world.
    Example :
    What would be the best approach to handle real-time intraday data storage? Example can be prices of stock ticks

    Ans : Plain binary files. 
    Can't beat them. With today's fast computers any superimposed database layer will create unnecessary overhead (speed and code).

    Datafields:
    Byte key (trade, dom bid/ask event, volume, others)
    Single price
    Long volume
    Long timestamp (millisec from 00:00 same day)

    One file per symbol per day.
    Very simple to access, search, analyze.





    They sometimes hold a GD
    The topic is the same every time : you will be given a sheet with some 12 people, occupations and personality . Then you are told that they are on a sinking ship and you can save only some, say 6. So you discuss and choose people with good justification


    For the interview:

    What's a superday? 

    A day of one-on-one meetings with employees in a particular division or group. Do know where Goldman Sachs stock is trading that day. Do not be late.



    They usually start with tech questions and the interview goes in the direction you want to.

    + points if you can talk about and are prepared for :
    • finance option pricing, no arbitrage principle (For strategist profile)
    •  brainteasers and puzzles
    • current events : if an investment banking position
    I prepared questions like "How does Goldman make profits?", latest IPO, company stock price, markets in general, option trading

    Goldman's advice: "Demonstrate a passion for financial services." 
    <picked directly from their website>


    For a pure investment banking role , here are the questions I picked from glass door. This is for Quant role (Usually PHD s in financial mathematics)


    1. How does the PE of a firm change after a stock split?  
    Ans : When stock splits, price changes to half, so does the earnings per share. (As number of outstanding shares double). So P/E does not change.

    1.  What is outlier? Why we are concerned about them - give a situation ? How to detect it?
    Ans : Make up a situation. My favorite one is that if Bill gates walks into a bar, the average income of every person present jumps to a million.
    There, Mr. Gates is your outlier
    Use statistical tools to detect them


    1.  2008 crisis-extreme value theory?

    1. Suppose you have three call options on the market, with strikes 10, 20, and 30. Suppose the call option with strike 10 costs $12, the call option with strike 20 costs $7, and the call option with strike 30 costs $1. Does there exist an arbitrage opportunity? 

    Ans :
    here is an elementary model-free theorem that says that call option prices are a convex function of strike. In this example, they are not so there must be an arbitrage.
    By Jensen' inequality, the average of 10 call and 30 call should be greater than 20 call. Here 20 call is overpriced
    The way the theorem is proven is to take the portfolio 
    +1 C(10)
    -2 C(20)
    +1 C(30)
    Long 10 call and 30 call and short the 20 call
    and observe that the pay-off is positive or zero so the price must be positive. 


    Study links :


    1. A 2 year bond, yield 6%. A 1 year bond, yield 4%. What's
       the implied rate for the bond that starts one year from now? 

    Rate of Interest = ((1.06)^2)/(1.04) - 1 This comes from No Arbitrage Principle. On solving it gives you 8%. This is valid only if the bond under consideration has the maturity of 1 year.

    Study links :






    1.   What do you mean by lift chart?
    2.  Stability of a system?
    3. Describe eigenvalues and eigenvectors?
    4. What do factor analysis
    5. Give me three stock picks and why.  What is the 5 yr bond rate?

    Know your basic finance well : duration, convexity, CAPM and economics (inflation/deflation)

    General tips :
    If you can talk about this, win-win situation
    They also asked about current finance news
    Interact with and learn the names of your interviewers, you may be questioned on this later, and people skills are highly valued.
    Read about the company, and the division to which you are applying, know exactly what it is they do.
    Read the Goldman Sachs annual report (available online)
    What we expect you to accomplish early on, what attributes make our top performers so outstanding, what you can do to truly drive results, how you’ll be evaluated --all the things that matter to you and to us and our businesses.



    Bring a “project.": Do a little research about the company. That’s not impressive; that’s a given.
    To really impress the interviews:
    "tell us how you will hit the ground running and contribute right away -- the bigger the impact the better. If you bring a specific skill, show how we can leverage that skill immediately.
    Remember how we see it: We have to pay you starting day one, so we’d love to see an immediate return.
    We want you to ask for the job… and we want to know why.
    By the end of the interview you should have a good sense of whether you want the job. If you need more information, say so. Let’s figure out how to get you what you need to make a decision."

    That article is a must read for every interview you go to





    Do negotiate :

     Many year-end bonuses are tied to performance metrics and the amount can vary depending whether certain milestones are met. Sign up bonus is easier to negotiate because it is a onetime thing.





    I am writing this page due to sunk cost fallacy : the 12+ hours I spent on researching about GS should be shared and saved (This way I can get rid of the albatross around my neck)
    Most of the research was picked from glassdoor.com . Thank you for the wonderful website and tool.
    Disclaimer : I do not own most of content .