Vittarth Recruitment Test

Rules and General Guidelines:

Do not cheat.
The test is divided into 3 sections
The first two sections are mandatory for all.
The third section is only for the students who are interested in marketing and design.
The test ends at 12:00 AM 24th July
The test is designed to check your approach to the question and not the answers.

Section A
1. Why do you want to join vittarth? (write your answer in 50-100
words)
Section B
1. In January 2021, a short squeeze of the stock of the American
video game retailer GameStop (NYSE: GME) took place,
causing major financial consequences for certain hedge funds
and large losses for short-sellers. The short squeeze was
initially and primarily triggered by users of the subreddit
r/wallstreetbets, an Internet forum on the social news website
Reddit, although a number of hedge funds also participated.
At its height, on January 28, the short squeeze caused the
retailer's stock price to reach a pre-market value of over
US$500 per share, nearly 30 times the $17.25 valuation at the
beginning of the month.

What is meant by short-squeeze? Why do you think the price

keeps on going up in event of a short squeeze? ( answer in
own words) Why do such incidents don’t take place in Indian
markets?
2. Why do you think the interest rates are low nowadays? what is
the effect of interest rates on inflation?
3. Suppose that you and your friend Anant are playing a game in
which you have to pick one deck out of the four. Then you
both have to choose a card from the deck you picked at
random and the person getting the biggest number wins. You
as a finance enthusiast are very good with taking optimal
decisions and are always driven by logic. Anant being a
generous person gives you the first chance to pick a deck,
which deck will you choose to have the maximum probability
of winning and why? These are the four choices to decks:
Deck1: 6 6 6 6 6 6
Deck2: 4 4 4 4 12 12
Deck3: 2 2 2 10 10 10
Deck4: 0 0 8 8 8 8

4. Identify the company from the clues below:

a. I am the only player in India and second in the world to
have public ownership of my business.
b. My founder parents began their business in the 18th
century and were the first player in the whole of Asia.
c. It took only 20 years since I began the business to
become the largest in my space in India. My founder
company lost their leadership to a competitor but I
managed to retain mine.
d. Though my IPO got oversubscribed over 100 times and
got listed at 80% premium, my valuation didn’t move for
the next 3 years. I have delivered 6x return from March
2020 levels.
e.
5. You and your friend Chirag are cult fans of cricket. However,
unlike you, Chirag is a compulsive gambler and regularly bets
on India in various matches and tournaments. India and
England are about to play a 5 match T20 tournament in March
 and Chirag is already pepped up about seeing India win and
making a lot of money. He wants to bet Rs. 25,000 on a
double or nothing bet in which he gets double the money if
India wins the tournament, otherwise nothing. Matches in T20
rarely ever tie so you may neglect the probability of a
particular match ending in a draw. Also, both India and
England are extremely strong forces in international cricket
and equally likely to win on any given day. Any team that wins
3 matches first wins the trophy. Unfortunately for Chirag
though, the bookie is taking bets on seperate matches only
and not the tournament as a whole. That means he can't bet
on the outcome of the entire tournament and will have to place
the double-or-nothing bets on individual matches itself. Help
Chirag to model how much money he should bet before each
match of the tournament so that in the end, he gets double his
money (Rs. 50,000) if India wins the trophy and loses his initial
Rs. 25,000 if India ends up defeated.

6. Bonds - are debt instruments in which an investor loans

money to an entity( corporate or government) that borrows
funds for a defined period of time at a fixed interest rate.
Features of bond:
a. Principal: Nominal, principal par or face amount- the
amount on which the issuer pays interest, which most
commonly has to be repaid at the end of term.
b. Maturity: The receiver has to repay the nominal amount
on the maturity date. The maturity can be any length of
time.
c. Coupon: The coupon is the interest rate that the issuer
pays to the bondholders. this rate is fixed throughout the
life of bonds in case of fixed-rate bonds.
 The price of the bond is the net present value of all cash flows
expected from that bond. Check out this video on bond price
calculation here.

C = Coupon rate * F / No. of coupon payments in a year

r = yield to maturity

n = No. of years till maturity * No. of coupon payments in a year

F = face value
Find the price of the Bond.

principal 1000

coupon 4%

maturity 3 years
Frequency 2 per year
Yield to maturity 6%

Section C
(For candidates with an inclination towards marketing)
1. Design a social media post for vittarth. (Example: Linkedin)