It's like in any competitive exam where there are too many candidates and not enough positions. If you ever look at the type of math and science problems on Chinese university exams they are not necessarily advance in terms of the topic but they are extremely tricky. A electromagnetism question testing your knowledge of Gauss' law usually in a regular setting would use a charged sphere or some other object with geometric symmetry you can take advantage of. I have seen one question where it involved Gauss' law around the corner of a pipe (the elbow part).

It's just an exercise to see "how badly does this guy want it? how much did you cram?" Like hazing.

As an anecdotal story, I once interviewed at a well known HFT in Manhattan, after jumping through the phone screen and timed coding interview (involving four questions), you were invited on site. The first thing you do on-site (10 am in the morning) is take a 2 hour multiple choice exam consisting of 100 questions and get this - it was literally on scantron card, so they can score it right away (exactly how I used to multiple choice exams in high school).

If they didn't like your score, you were sent packing right away, otherwise the real interviews would begin with actual people throughout the afternoon. Allegedly, the way you knew this was, if you they asked you what you wanted to lunch, that meant you passed and could go to the one-on-one interviews.

I didn't get the job in the end, but I did get a ham sandwich and soda out of the deal.