Finance Interview Guide: Advanced concepts for Markets Role

This book provides an in-depth overview of securitization, asset-backed securities, and advanced trading strategies. Some key points covered in each topic are:

Securitization:

• The book covers the basics of securitization, including the benefits and risks associated with this process.
• It discusses the various types of assets that can be securitized, such as mortgages, auto loans, and credit card receivables.
• The book also delves into the legal and regulatory framework for securitization.

Asset-Backed Securities:

• The book provides a detailed overview of asset-backed securities, including their characteristics, benefits, and risks.
• It discusses the various types of ABS, such as residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and collateralized debt obligations (CDOs).
• The book also covers the process of creating and structuring ABS, as well as the role of credit ratings agencies.

Mortgage-Backed Securities:

• The book provides an in-depth overview of mortgage-backed securities (MBS), including their structure, characteristics, and risks.
• It discusses the various types of MBS, such as pass-through certificates, collateralized mortgage obligations (CMOs), and stripped mortgage-backed securities.
• The book also covers the role of government-sponsored entities such as Fannie Mae and Freddie Mac in the MBS market.

Credit:

• The book covers the basics of credit risk, including credit ratings, credit spreads, and default probabilities.
• It discusses the various types of credit instruments, such as bonds, loans, and credit default swaps (CDS).
• The book also covers credit risk modeling, including structural and reduced-form models.

Options - Advanced:

• The book covers advanced option strategies such as bull spreads, bear spreads, box spreads, butterfly spreads, and straddles.
• It also covers option combinations, such as call spreads, put spreads, and strangles.
• The book provides an in-depth overview of option pricing models, including Black-Scholes and binomial models.

Trading Strategies:

• The book covers various trading strategies, including basis trades, steepeners, flatteners, barbells, and bullets.
• It also covers delta hedging, rolling hedges, and the hedge ratio.
• The book provides an overview of mezzanine debt, contango and backwardation, swaptions, and American Depository Receipts.

Regulations:

• The book covers key financial regulations such as the Glass-Steagall Act, the Volcker Rule, the Smoot-Hawley Tariff Act, and the Dodd-Frank Act.
• It discusses the causes and consequences of financial crises, including the Great Depression, the Savings and Loan Crisis, Long-Term Capital Management, and the Asian Currency Crisis.

Overall, this book provides a comprehensive overview of securitization, ABS, MBS, credit, options, and trading strategies, making it a valuable resource for finance professionals and students al