Morgan Stanley Senior Associate Interview Questions, Process, and Tips

Q1. Option pricing model- BSM assumptions and explanation
Ans. 
Black-Scholes-Merton (BSM) model is a mathematical model used for pricing options.
• BSM model assumes constant risk-free rate, constant volatility, and lognormal distribution of stock prices.

• It assumes no dividends are paid during the option's life.

• The model assumes the option can only be exercised at expiration.

• The underlying stock follows a geometric Brownian motion.

• The model is used to calculate the theoretical price ...read more
Answered by AI
Add your answer
Q2. Explain options and it’s pricing
Ans. 
Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a specific time period.
• Options can be call options or put options

• Call options give the holder the right to buy the underlying asset at a specified price within a specific time period

• Put options give the holder the right to sell the underlying asset at a specified price...read more
Answered by AI
Add your answer

Q1. Why is ATM option delta 0.5
Ans. 
ATM option delta is 0.5 because it represents a 50% chance of the option expiring in-the-money.
• ATM option delta is 0.5 because it is at-the-money, meaning the option strike price is equal to the current underlying asset price.

• Delta measures the sensitivity of an option's price to changes in the underlying asset price.

• A delta of 0.5 indicates a 50% probability of the option expiring in-the-money.

• ATM options have the hig...read more
Answered by AI
Add your answer
Q2. Current affairs on interest rate
Add your answer

Q1. Implement heap? Question related to Priority Queue
Add your answer

Q1. What are hedge funds, and what are their products and structures?
Add your answer
Q2. What are bonds and what are the different types of bonds?
Add your answer

Q1. What are corporate actions and what are their types?
Add your answer
Q2. What is the difference between the dirty price and the clean price of a bond?
Add your answer

The one-hour coding test included multiple-choice questions on Java and MySQL, as well as two coding questions.

Q1. It was based on Binary Search, Find the target element in the shifted sorted array.
Add your answer
Q2. Comparator vs Comparable. Sort List of employee object using salary attribute
Ans. 
Comparator is used to define custom sorting logic, while Comparable is used to implement natural ordering. Sort list of employee objects by salary using Comparator.
• Create a Comparator implementation to compare employee objects based on salary attribute

• Use Collections.sort() method with the custom Comparator to sort the list of employee objects
Answered by AI
Add your answer

Q1. Basic OOps concepts.
Add your answer
Q2. Dasic DBMS
Add your answer