Faced with a growing number of junior applicants, banks, hedge funds and other sorts of financial firms have begun relying more on technology to help pare down the thousands of interested students to a reasonable number for in-person interviews. Some utilize software that can screen resumes, while others have incorporated recorded video questions as the first step in the interview process for prospective interns and analysts. Steven Cohen’s Point72 Asset Management even uses an online IQ test of sorts as part of its assessment process for juniors.
Those who apply for internships or full-time positions within the hedge fund’s Point72 Academy will be asked to complete an online version of the Wonderlic Test, which assesses an applicant’s cognitive abilities through logic and problem-solving questions. The Wonderlic is utilized by thousands of organizations to help screen candidates, though its pervasiveness among financial firms is somewhat unclear. A few posts on forum Wall Street Oasis mention the Wonderlic as part of the interview process at a couple lesser-known buy-side firms, but recruiters we spoke to say it’s not an industry-norm, at least at the moment. One equities trader said they used the Wonderlic as part of an “Intern Olympics” competition this summer.
The test is perhaps most well-known for its use by the National Football League on prospective players. Polarizing scores tend to find their way into the hands of the media, which often creates a PR firestorm. A source close to Point72 said the test is used as one data point in assessing candidates, though it’s not near as important as a student’s GPA, board scores or interview performance.
The traditional Wonderlic Test includes 50 multiple-choice questions that need to be answered within 12 minutes, so the ability to think quickly yet critically is a must if you want to score well. Many of the questions are math-based, though it’s more of a test of reasoning than accelerated math skills. A few examples from online practice tests:
- What is the next number in the sequence: 4, 11, 25, 53...?
- A gallon of gas costs $3.80. How many gallons of gas can be purchased with $19?
- Two women start at the same point. They walk in opposite directions for 3 meters, then turn right and walk another 4 meters. How far apart are they?
- The square footage of a room is 1,400 ft. If the one side is 25 ft long, what is the length of the other side?
We’re told the Wonderlic Test is only administered for junior applicants: prospective interns and candidates interested in joining the Point72 Academy, the 10-month paid training program launched in 2015 that the firm uses as an incubator for investment talent. The hedge fund formerly known as SAC Capital is said to hire most of its junior talent from the academy.
Click here to try your hand at a practice Wonderlic Test. The average score for an investment analyst is around 27 out of 50, according to one test prep site. That's bested by teachers, accountants, programmers and engineers (29). Systems analysts (32) are the Wonderlic kings.
Have a confidential story, tip, or comment you’d like to share? Contact: btuttle@efinancialcareers.com
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by actual human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t).
FAQs
Not necessarily the highest echelons, but certainly well-above average, given that they are required quickly and effectively perceive, learn and analyze in various contexts (behavioral, financial, academic, strategic, etc.).
How to answer why a hedge fund? ›
Why Work at a Hedge Fund? Hedge funds are good if you're extremely passionate about the public markets, and you want to follow companies and other securities rather than work on deals. “Extremely passionate” means: You're constantly reading about the financial markets in books and other media.
What does the IQ test seek to test? ›
An IQ test is a standardized assessment designed to measure a person's intelligence or cognitive abilities. How is IQ measured? IQ is measured through various standardized tests that assess different aspects of intelligence, such as problem-solving, logical reasoning, and verbal and non-verbal abilities.
What qualifications do you need to work in a hedge fund? ›
Earn a bachelor's degree
Most entry-level positions at investing firms or hedge funds require this degree. When preparing for a career in a hedge fund, consider earning your bachelor's degree in math, accounting, finance, investment banking, economics or business.
Is hedge fund a hard job? ›
But even after that first year you get up to speed, the stress/hours don't end. If you are at a fund like a multimanager hedge fund where every day you either make money or you don't and your investment horizon is very short, the job will be extremely stressful.
Why are hedge fund owners so rich? ›
Hedge funds seem to rake in billions of dollars a year for their professional investment acumen and portfolio management across a range of strategies. Hedge funds make money as part of a fee structure paid by fund investors based on assets under management (AUM).
Why do hedge funds pay so much? ›
Why Do Hedge Fund Managers Earn So Much? Hedge fund managers' earnings are usually based on management fees and a percentage of the profits they earn, known as a performance fee. The more assets they have under management, and the higher the profits they earn for their fund, the more income they make.
Why does everyone want to work at a hedge fund? ›
Two major attractions of being a hedge fund manager are the money and the lifestyle. Salaries and bonuses are hundreds of thousands and fund managers typically have a share in their own fund – meaning that if the fund does well there's no limit to the income.
Is 120 IQ good? ›
An IQ level of 120 would be described as 'above average or bright' on an IQ scale. The average score is 100, and 68% of all people have scores between 85 and 115. What is a good IQ score? Any IQ score above 116 would be considered above average.
What is an average IQ? ›
In general, an IQ score is defined with a median and mean of 100. Scores above 130 are labeled as above average or “very superior,” while scores under 70 would be considered below average or labeled as “borderline impaired.” Most people have an average IQ between 85 and 115.
Yes, an IQ score of 121 is considered to be a good score. IQ scores are measured on a bell curve, and the average IQ score is 100. About 68% of the population has an IQ between 85 and 115. Therefore, an IQ score of 121 is higher than the average and is considered to be in the bright/very bright range.
What is Elon Musk's IQ? ›
In summary, Elon Musk is one of the most successful entrepreneurs of our time. He is the founder of Tesla, SpaceX, and several other companies. He is also known for his high IQ. Estimates of Musk's IQ range from 155 to 160.
What is a good IQ test score? ›
Historical IQ classification tables
| IQ Range ("ratio IQ") | IQ Classification |
|---|
| 140 and over | Very superior |
| 120–139 | Superior |
| 110–119 | High average |
| 90–109 | Normal or average |
3 more rowsWhat is the highest IQ ever recorded? Although it's unclear who has the highest IQ in the world, Marilyn Vos Savant's 228 score is the highest recorded IQ in the world.
Is it hard to join a hedge fund? ›
Becoming a hedge fund manager is challenging due to the high level of education, experience, and skills required. Hedge fund managers must possess strong analytical thinking, communication, attention to detail, and mathematical skills.
How stressful is it to work at a hedge fund? ›
It's extremely difficult to break into hedge funds, and once you're in, the job is stressful and requires long hours and sacrifices. But if you perform well, you can advance quickly and earn high salaries, bonuses, and carry (the profit share from investment returns) in the process.
Do hedge fund jobs pay well? ›
Many people are drawn to the hedge fund career path because of the money: even junior-level employees can earn $500K up to $1 million, and senior-level Portfolio Managers can go well beyond that.
What degrees do hedge funds look for? ›
A Bachelor of Science (B.S.) degree in finance is ideal for a variety of hedge fund jobs, but your major will matter. Bachelor of Science degrees in mathematics, accounting, physics, computer science, and even engineering are also useful, given the recent rise in algorithmic trading.
