Can you tell me what an XML market data service is and how it interacts with outside entities?

If you have experience developing transactional websites, this should be an easy question for you to answer. If your experience is limited and you know you're applying for a role that will require this, you should conduct a great deal of research before the interview. You may even want to create some practice sites that leverage this technology so you will be familiar with the processes and the challenges you are likely to encounter.

"An XML market data service is an application that enables the user to perform transactions using external data. XML external entities are a type of XML entity whose values are obtained from outside of the document type definition in which they are declared and are defined based on the contents of the file path or URL. This typically involves market data, such as stock trading or eCommerce."