A time-tight test that combines math and finance knowledge to create a task-specific assessment for SIG candidates.
The Susquehanna International Group (SIG) Capital Markets test uses a variety of finance-related questions to assess your analytical skill and inclination for finance and markets.
The following will provide you with exact details on the test structure and content, including free practice and expert tips.
The ONLY authentic prep for the SIG Capital Markets assessment is now available! Check out the Preparation section for more details.
Section #1 – Accounting and Corporate Finance Theory
This section contains 7 multiple-choice questions on basic financial terms and standards. Each question has 4 possible answers, only one of which is correct.
The questions are mostlytheoretical, and do not require calculations.
Sample Question
What is the best metric to value a fast-growing, non-profitable company?
P/E
P/S
P/B
EBITDA
You may find the answer and explanation to this question, alongside additional sample questions from the SIG Capital Markets assessment in the Free Practice section.
Section #2 – Stock Valuation and Financial Analysis
This section contains 7 questions, both multiple-choice and free-form. The questions combine understanding of fiscal principles, as well as calculating theoretical values of stocks and companies.
Sample Question
Company 1 is negotiating a deal to acquire Company 2. The proposed acquisition price is $15 per share. When the deal was announced, the initial stock price of Company 2 was $10. However, the agreement collapses, and Company 2 remains an independent identity. In the time between the announcement and collapse of the deal, S&P500 is down 3%.
Estimate the trading price for Company 2.
Pro Tip
Free-form questions in the assessment will direct you in which formatting to put your answer (e.g., $xx.xx, $kx, etc.). Make sure you follow this formatting precisely!
Section #3 – Analyst Expectations
This section contains 9 questions, most of which require you to perform analyst expectations based on various financial situations. Therefore, most questions in this section are free-form.
In addition, the section also includes several basic probability questions.
Sample Question
Company 1 is about to launch a new product. 75% of the company’s product launches are successful. 60% of launches are moderately successful, and in that case the stock price will rise to $6, and 40% of them are extremely successful, in which case the stock price will rise to $8.
If the product launch fails, however, the stock price may fall to $4, if the failure is moderate, which happens 50% of the time, or $2.5, if the launch is an extreme failure.
What is, in your opinion, the fair stock value?
SIG Capital Markets Assessment Preparation
The only tailored preparation for the SIG Capital Markets test.
Authentic practice tests
Tailored to the actual test’s subject matter
Follows the test’s multiple-choice + free-text format
30-day access
What Do You Get?
3 online practice tests (69 questions total)
Each test resembles the real SIG Assessment content, sturcture, and format.
Highly detailed answers and explanations to all questions
30-day access
The preparation is conducted on third-party website ClassMarker.
The SIG Capital Markets Assessment will assess three major areas:
Basic knowledge of finance and accounting.
Problem-solving skills.
Numerical reasoning.
All these are intended to measure whether you have the required knowledge and cognitive ability to perform the day-to-day work expected of SIG employees.
The SIG Test Invitation
The invitation to take the Capital Markets assessment is actually split into 2:
The SIG Invitation
The Mettl (test provider) invitation.
The SIG Invitation
Once you have passed the initial resume stage, you will get a test invitation from SIG, with some basic information about the test.
Here are the major things to consider:
The assessment is held by a third-party testing company named Mettl.
The invitation from SIG will not include a test link. That will be sent separately, directly from Mettl.
You may use a pen, paper, and calculator, but no additional source.
Do NOT try to cheat! If you navigate out of the testing window or open a new tab, your assessment will be instantly stopped.
You have 7 days to complete the assessment.
The Mettl Invitation
The second email you will receive is from Mettl, the test provider. That is a very simple notification, containing a link to the test itself and a prerequisite system compatibility check.
Pro Tip
The assessment’s interface may be a bit confusing. In lieu of the short time frame for the overall test, we recommend reading the Test Interface section as well.
Test Interface
Here is an illustration of how the SIG/Mettl testing screen generally looks like:
Several things to note:
The test instructions will state that the sections are “untimed”, but that only means that the time limit is for the overall test, and not for any particular section.
Once you have started, you cannot pause the assessment in any way.
You may move freely between questions and sections.
You may mark a question for later review.
The test interface includes a “question filter”, which allows you to conveniently track your answered and unanswered questions.
What is the best metric to value a fast-growing, non-profitable company?
P/E
P/S
P/B
EV/EBITDA
Answer and Explanation
The correct answer is B – P/S (Price to Sales ratio).
In the case presented, traditional metrics like Price to Earnings (P/E) or Price to Book (P/B) might not be effective. That is because these metrics mostly rely on earnings and book value, which could be very small or even negative in the case of a fast-growing, non-profitable company.
The same goes for EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric is also not a good choice, since it involves operating earnings, which might not yet be significant in the case of a non-profitable company.
The Price to Sales (P/S) ratio, on the other hand, compares the market capitalization of a company to its total revenue. This metric is useful for valuing companies with high growth potential and low or negative earnings. A high P/S ratio indicates that investors are willing to pay a premium for each unit of sales generated by the company, which is typical for rapidly growing enterprises.
Question 2
You buy a drink for $2.5, and randomly pay with one of six bills found in your pocket:
3 bills of $5
2 bills of $10
1 bill of $20
What is the average sum you get as change?
Answer and Explanation
The correct answer is $6.70.
Since the bill used to pay is picked randomly, to find the average change value, we need to calculate the probability of each bill showing up, and multiply it by the respective value of change:
$5 bill – 3/6 = 50%
$10 bill – 2/6 = 33%
$20 bill – 1/6 = 17%
Average Change = 0.5 x (5 – 2.5) + 0.33 x (10 – 2.5) + 0.17 x (20 – 2.5) = 6.7
Note that the answer may seem counterintuitive, as you will NEVER get exactly $6.70 as change. However, that is the average sum you will get as change, given the data.
Question 3
Company 1 is negotiating a deal to acquire Company 2. The proposed acquisition price is $15 per share. When the deal was announced, the initial stock price of Company 2 was $10. However, the agreement collapses, and Company 2 remains an independent identity. In the time between the announcement and collapse of the deal, S&P500 is down 3%.
Estimate the trading price for Company 2.
Answer and Explanation
The correct answer is $9.70.
We need to estimate the current standalone value of Company 2’s stock after the deal falls apart. That current value is calculated as follows:
Original Price + Estimated Change (According to S&P50) =
$10 + $10 x (-0.03) = $9.70
The original bid made by Company 1 ($15) is irrelevant.
Question 4
Company 1 is about to launch a new product. 75% of the company’s product launches are successful. 60% of launches are moderately successful, and in that case the stock price will rise to $6, and 40% of them are extremely successful, in which case the stock price will rise to $8.
If the product launch fails, however, the stock price may fall to $4, if the failure is moderate, which happens 50% of the time, or $2.5, if the launch is an extreme failure.
What is, in your opinion, the fair stock value?
Answer and Explanation
The correct answer is $5.9125.
Let’s summarize all probabilities and stock values in a table:
Scenario
Probability
Price
Success
0.75
—
Moderate
0.6
$6
Extreme
0.4
$8
Failure
0.25
—
Moderate
0.5
$4
Extreme
0.5
$2.5
The calculation is done as follows:
Stock Value = 0.75 x (0.6 x 6 + 0.4 x 8) + 0.25 x (0.5 x 4 + 0.5 x 2.5) =
In a nutshell, for each scenario price is multiplied by the relevant probability, and then all probabilities are summed.
E.g., the stock price in the case of an extreme success equals:
Stock Price in Case of Extreme Success ($8) x Probability of Success (0.75) x Probability of Extreme (0.4).
The final calculation presented above is a compact form of these calculations across all possible scenarios.
Pro Tip
You may also encounter reverse expectation calculations on the SIG Assessment. Check out the next example.
Question 5
Company X’s stock is trading at $15. The company is expecting a ruling in an important legal case. If the company wins the case, stock price will rise to $22, but if the company loses, it will go down to $10.
What are, approximately, Company X’s estimated chances of winning the case?
Answer and Explanation
The correct answer is 42%.
The current trading price of $15 is the result of the market’s expectations as for Company X’s chances of winning its legal case. Therefore, the way to solve this question is by using the exact same formula as in question 4, but in reverse.
We will note the expected probability of winning as W. therefore, the probability of losing is 1 – W.
Considering all the unique features of the SIG Capital Markets Assessment, here are 4 tips for acing it:
Tip #1 – Start from the End
While the SIG Capital Markets Test is not a speed test, time is a contributing factor, especially in sections 2 and 3, where calculations are required.
The questions in section 1, however, are multiple-choice theory questions, and extra time is not very likely to help here.
As such, start with sections 3 and 2, which are more time consuming, and leave the quicker questions on section 1 for last. The Test Interface allows you to do that.
The test instructions allow you to use a calculator.
Most of the calculations required on the test questions can be summarized into one or two equations – equations that modern calculators can solve in a single click. When practicing, we recommend taking this into account, formulating these equations in advance, then typing them into the calculator in their entirety.
This method is:
Faster
Less prone of calculation errors
However, do remember that even minute calculation errors may disqualify your answer in the free-form questions, so it is recommended to always double-check.
Tip #3 – Refresh Your Memory on the Theory
Make sure you spend some time going over basic concepts and terms in accounting, corporate finance, and financial analysis. These will constitute most of the questions in section 1 and may also be required in several questions on the other two sections.
Tip #4 – Follow the Required Answer Format
As previously mentioned, the free-form questions will usually describe the exact answer format you should type.
You MUST follow this format, as failing to do so will likely disqualify your response, even if it is correct.
