BMO Financial Group Interview Question

These will test your mathematical, statistical, and programming skills. ✅ Probability & Statistics Explain the Central Limit Theorem and its significance in finance. How do you check if a dataset follows a normal distribution? Given a biased coin, how would you estimate the probability of heads using Monte Carlo simulations? Explain heteroskedasticity in regression models and how you would handle it. What is autocorrelation, and why is it important in time series analysis? ✅ Machine Learning & Predictive Modeling What are the pros and cons of linear regression vs. decision trees for financial modeling? How do you prevent overfitting in a machine learning model? Explain the difference between bagging and boosting. If you have an imbalanced dataset (e.g., fraud detection), how would you handle it? ✅ Time Series Analysis & Financial Models How would you model stock price movements? What is an ARIMA model, and when would you use it? What are some common risk metrics for evaluating a trading strategy? How do you calculate Value at Risk (VaR) for a portfolio? ✅ Programming (Python, SQL, VBA) Write a SQL query to find the top 5 performing stocks in the last 3 months. How would you implement a Sharpe Ratio calculation in Python? What is vectorization, and why is it important in Python (NumPy/Pandas)? Given a large dataset that doesn’t fit into memory, how would you process it efficiently?