CQ_Finforte | Sahil Agarwal | Morgan Stanley

Thank you, Charvi! Yeah sure, please go ahead.

For day 1, I was shortlisted in 3 companies: Morgan Stanley, IARC (International Asset Reconstruction Company) and Blackrock. Morgan Stanley was my 1st priority. And, by the time I interviewed for MS and IARC, I had received an informal confirmation from MS. So, naturally, I didn’t appear for Blackrock. Now, both MS and IARC follow a similar scheme of recruitment: AMCAT (an aptitude test) score & CV based shortlisting followed by 4 rounds of Interviews. The AMCAT is essentially a watered-down version of CAT (i.e. quantitative, logical reasoning, data sufficiency etc.). The only difference is that while AMCAT is relatively easier compared to CAT, it has a much stricter time-bound. For instance, there’s not only a section-wise time-bound but also no flexibility of switching over questions even in the same section, i.e. you need to attempt a question to move to the next one & you cannot navigate back once you attempt it and move on. That is how they implicitly ensure that you don’t give a lot of time to a single question. Having said that, preparation is quite straightforward. There’s an ample amount of sample AMCAT videos on youtube (and quite representative, to be honest!). Both MS and IARC had an AMCAT, but MS also had some 3–4 additional sections. These were basic accounting (requires 2–3 weeks worth of knowledge of financial statements, revenue recognition etc.), listening, reading and speaking (you have to read out phrases shown on the screen, you’ll be given a topic on the spot and 30secs to prepare for it and speak over a minute etc.)

Coming to the interviews, let’s discuss one by one. MS had 3 technical rounds + 1 HR round. Across the 3 technical rounds, you meet with people with varied seniority ranging from 5 yrs. to 10 yrs. of experience. Usually, 1 or 2 of them are KGP alumni. That’s the way the cookie crumbles! The HR round happens at the last and only if you clear all the technical rounds. IARC had 4 rounds (and each round was a mix of both technical and HR). So you have four partners of different seniority in IARC, and each of them will interview you. In technical rounds, usually, you have people. For both MS and IARC, each round can last from 15–20 mins.

I gave eight interviews that day, 4 for Morgan Stanley and 4 for IARC, and they always begin with the introduction. The first minute or two goes with the introduction, and then in the process, you may be asked to briefly go through your CV or some specific project/internship which piques the interviewer’s interest. Remember that the interviewer usually doesn’t have any great idea about what you did or why you did what you did. So, they’re looking forward to understanding exactly that. People usually make 2 mistakes here. First, they don’t practise/prepare for it upfront. They sort of feel that, “After all, it’s my work. I can definitely explain it. What’s the big deal”. Second, they often give too much emphasis on a very small detail of their project just because that was the most ‘difficult’ part for them while working on the intern/project. Don’t make these very common mistakes. Do rehearse each project/intern mentioned in your CV and don’t get lost in explaining the very nitty-gritty details of your work unless they specifically ask about it. I used a basic mental structure to whip each of my interns/projects: ‘What was the broader objective of the project?’, ‘What was the solution/technique used by me?’, ‘What was its performance?’ (e.g. saved costs, increased accuracy, saved time by automation, increased user engagement etc.) E.g. In one of my interns at a global bank, my job was to forecast an economic indicator in Australia. So, I should be able to tell the interviewer that why on earth does the bank want to do that (objective) — bank wants to do it because when they are giving out loans, they need to know how risky the loan is, and for that, they need to project or forecast certain variables, accordingly they will be able to keep some capital or cushion aside. Then, I would tell him that I used (technique) VAR or ARIMAX or LSTM etc. And, that VAR performed much better for [so and so reasons] than ARIMAX and LSTM by [this much]. In fact, they used my model for in-house forecasting purposes for the next quarter projections. That’s it! You don’t need to push him into the math of VAR or the R libraries that you had to use to do it. It’s only when he asks you about it that you go in deeper. Moral of the story: Break every intern/project into 3 things: Objective, technique and performance.

Now, coming to the questions that were asked. It was probability puzzles, valuation and basic finance (like time value of money, annuity etc.). There was a probability question, with a follow up to the Monty Hall problem. There were three doors, one of them had the prize, and I was asked to choose one door among the three, and I chose B. He opened one among A and C and told me that I still want to go with B or you want to switch. I said yes, Sir, I will switch, because the probability of winning is ⅔. He asked what mistake did the game host make (which made my winning probability increase on switching)?. Hence, the answer to this question was, Because he is purposely choosing the gate which does not have the gift, he is giving away information by consistently not trying to give away information! In that particular round, he asked how much finance do you know? Not a serious question, and if you say I don’t remember much finance, then they will say ‘why have you chosen this role’ (sales and trading). I said I know ‘above average’, because I have done CFA Level 1, had a couple of certifications and also done an internship in finance. Then finally, at the end of the round, the interviewer asked if you have any questions for me. I asked him to explain the role (a very safe, straightforward question). This was the first technical round. Then the second technical round again started with an introduction. Then again, a probability question was asked on a dice, jee level problem. One of the questions asked to my friend was based on geometry, “if the triangle is a right-angle triangle, you know the three sides of it tell me the altitude dropping on the longest side?” We just had to equate the area! Then came a really interesting question, where he asked me, “where do you live?” I said West Bengal. He then asked,” Pick up one of your favourite buildings in West Bengal” I picked the British Embassy, a nice library. They said, “Value that building.” Now, it’s a question of valuation of real estate, from a finance perspective you should be able to tell them the first hint of it, that it has to be a DCF valuation, I asked him what is the purpose for which I want to buy it? Is it for living purpose or for commercial purpose?, so he said for commercial purpose (an approach: keep asking follow-up questions he may answer but may or may not give you concrete data/numbers), he is expecting to see how many relevant questions we can ask, so I continued with it and gave a proper answer, By this time the technical part of the round was over, then he asked,” I see you have done two minors, so do you know when the minor programmes started?”. For him, it was a nostalgic moment because the time when he entered college was when the minor first began, I said, “No sir, I don’t remember”. In such situations, you just pick up some conversation and go along. You need to be someone who can maintain the conversation, both technical and non-technical, without losing your professionalism. Morgan Stanley was looking for the profile where you have to talk to people up and down across the continent. Then comes the third technical round, Once again, I was asked for an introduction, and then he started with the question: “Why do you want to go into finance?”. Then he asked me, “I see you have done CFA,” so he asked me which subject is your favourite. I said “portfolio management”. He asked,” you are given two choices: 1 million INR straight away or 50,000 INR every year forever. Which one would you pick?”. Now, this is based on the time value of money. The catch is to remember that it depends on the interest rate (and not your mood!). So I gave my final answer as “Sir, if the discount rate in the market is less than 5%, I will go for 50000 INR every year, else I will go for one million straight away”. The interviewer followed up by asking, “What is the rate currently?”. I said, “ T-bills are trading around 6%. And these are the lowest discount rates in INR. So, definitely I would go for 1 million right away.” He then followed up by asking, “Fine... Sahil. You get your 1 million INR. How will you manage this money? Now once again, the reason why he asked this question is that I said earlier that I like portfolio management. So he was testing me. I asked two-three follow-up questions and ended up giving an elegant process-oriented answer like ‘investor preferences’, ‘capital market expectations’ (instead of something very crude like ‘20% in stock x and 80% in bond y’), which is what I guess he was looking for. And there ended all the three technical rounds.

Finally, the easiest of the rounds: HR round. The whole purpose of this round is to see if the person is presentable, she knows that you have cleared the technical rounds, so she is in no way interested in knowing how smart you are. She just wants to see that, can you become a part of an organization that is ten times or 1000 times larger than you? So the questions that are asked are very standard. The first question is- introduce yourself. Why do you want to join Morgan Stanley? What are your strengths? Why should we hire you? Do you know the company? They even asked me if I am comfortable operating in the night shifts because they have a very fluctuating schedule because I will be working for US or Hong Kong clients who operate in a different time zone. These are very standard HR questions, and if you know enough about yourself, everything will go smoothly.

I personally believe that everyone should have a decent amount of financial literacy not just for placements but life in general. And, CFA Level 1 is the highest quality way there is towards that aim. It is conducted 4 times a year. No doubt it is costly, but there are scholarships available and many people are lucky to get one. For example, in my case, I got a scholarship in CFA level-2, so you can apply for scholarships and test your chances. Now suppose you don’t get a scholarship. You should again think once how passionate you are about this. Since you are not getting a scholarship, that means you are supposed to pay for it. If you believe that you are passionate about this, sooner or later, I want to learn about this, then pay it because it’s worth the money. Still, if you think that — ‘I am not so sure about it, in that case, earlier I used to say, ‘go for Varsity modules by Zerodha’.But now I say that there is another option, i.e. CFA investment foundation, This charter is given by the CFA Institute itself. The difference is: CFA is a very comprehensive exam having three levels, and you have to pay for it. In contrast, the CFA investment foundation is free of cost, and you go on the CFA institute website, you make an account free of charge. You can easily enrol into the CFA investment foundation, whose content and coverage is nearly 20% of the CFA Level 1. Once you are done with the material, then tests are conducted, a short online test, if you clear the test you will get the certificate, and the whole thing was free, the only thing you invested was time and energy, so this is the second option for people who are not so sure & just wanna have a peek into finance. If you really want to go into finance while at IIT, then you need to pursue a charter/ certification, there is no other option, so if you are honest and you want to pursue something in this field, you should do CFA level 1. I don’t recommend FRM for the simple reason that FRM is financial risk management, and you will be able to do this properly only if you know some finance already. I have friends who have done FRM and have themselves admitted that CFA would have been a better certificate to pursue during IIT. So I do not recommend this course if anyone wants to learn finance. This is all from my side.