Interview question

Jack Law's picture

Jack Law

Sep 27th, 2016 5:12am

  • CFA Level I Candidate
  • 18 AF Points

Guys I recently had an interview with an investment banking firm. They asked me a number of questions relating to economics and derivatives.

One stood out in particular for me. They asked me if I wanted to move large amounts of oil from the Middle East to Europe how would I do it? They also specified that I should use derivative contracts and that the outlook for the price of oil is positive.

So I just said purchase a basic long futures contract on oil. They didn’t specify how many barrels they wanted.

I thought it strange that they made me use derivatives. Would any of you have done it a different way? Also I pondered the question as to what if the outlook was negative?