“If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not, split and reevaluate”. Rightly quoted by the Chinese philosopher, Sun Tzu, this famous adage fits best in a situation when you are just about to face an investment banking interview. Imagine yourself being locked in an interview room for 30 minutes with hostile bankers who leave no stone unturned on asking obscure technical questions and grilling you to the worst on your background. While qualifying the investment banking interview is not rocket science, but surely your recruiters wouldn’t like you getting through it at the first instant. For almost every investment banking interview you face, you will certainly be asked some definite questions, examining your background and your interest in the related field. Thus, it gets very crucial in taking out some time and familiarizing yourself with such possible questions and preparing them accordingly so that you can at least get through them easily and conveniently, leaving only the technical ones to be answered by you. Listed below are some commonly asked questions at most investment banking interviews.
Sample Investment Banking Interview Questions
Why do you want to become an investment banker? Why only this career?
This is one of the most obvious questions put to a candidate in an investment banking interview. The recruiter wants to know your willingness and passion for joining one of the most lucrative jobs in the world today. As such, let your recruiter know the genuine reason for you joining this industry about safeguarding people’s dreams and ambitions. By imparting the right kind of knowledge, you can help people in deciding on the best investment option for them, rather than just indicating the revenue generation as your reason for becoming an investment banker.
What are the most important qualities for an investment banking career?
This question has mainly to deal with your academic qualifications and your motive behind joining the profession of investment banking. To answer this question, you will have to rewind back to your school books containing the concepts of business. You will have to mention your capability of handling numbers, knowledge of current and past market status, and possessing a good financial strategy as part of important qualities of an investment banker.
Why do you want to work at our bank?
This question is to test your homework and research done on this particular profession and job that you have applied for. You will have to talk about what makes this bank different from others, including the past and latest industry trends. Let your recruiter know that you have clearly understood about the bank and the services it provides. Go through the bank’s website and read all the latest press releases to drop in some noticeable points at the interview.
Describe some risks you have taken. How did you make the decisions?
As said, an investment banker is required to take tough decisions and risks cautiously. Display your analytical skills, highlighting logical assumptions and calculated guesses made by you while handling a risky project or decision in your previous projects. Mention that it is more important about being “roughly right” rather than “precisely inaccurate”.
Walk me through the high points and low points in your resume. What were your greatest accomplishments and challenges?
An investment banking job involves communication, leadership, problem solving, and working under pressure. Let your recruiter know that you can easily adapt to new styles and various methods of functioning, apart from willing to work in a large team. Clearly state your core competencies and how you have used them to accomplish measurable results at your previous job or project. Also, discuss your failures and how you have handled them and come out as a winner.
Why should we hire you?
Mention all your key skills and attributes from the job description prescribed for the said position. As an investment banker, you will be required to possess capabilities of problem solving, communication, and the drive to succeed. And if you are successful in convincing your recruiter about having all the qualities desired by the bank, you are way ahead of other candidates in getting short-listed. However, do not forget to mention your genuine interest in the financial markets which will again be an added advantage.
General Questions
-
Acquaint us with yourself and your family.
-
How do you deal with criticism, at work and in personal life?
-
How much do you believe in teamwork?
-
What is the definition of success in your terms?
-
Except investment banking, what are the other career opportunities you are exploring in the market and why?
-
When you are not working, what do you do?
-
How much do you read? What do you read?
-
Do you learn more from success or failure?
-
Do you have any specialization in investment field? With how many investment banks have you already worked?
-
What is more important for you: money or work?
-
How does your past career qualify you for a position in investment banking?
-
Are you a leader or a follower? Give examples.
Technical Questions
-
What is the appropriate discount rate to use in an unlevered DCF analysis?
-
What is typically higher – the cost of debt or the cost of equity?
-
How would you calculate beta for a company?
-
Two companies are identical in earnings, growth prospects, leverage, returns on capital, and risk. Company A is trading at a 15 P/E multiple, while the other trades at 10 P/E. Which would you prefer as an investment?
-
Discuss about the fluctuations of stock market over investment banking? Discuss the work flow in terms of profit?
-
How do you estimate net profits, losses and margins in investments?
-
Explain secure investment banking? Before any investment what factors would you like to judge?
-
Describe your investment bank strategic in general? Way of work? Methods you take?
-
How would you calculate a firm's WACC? What would you use it for?
-
Where do you think interest rates will be in the next 12 months?
-
Describe a typical day of an investment banking analyst.
-
Why do you think two organizations collaborate with each other?
With these investment banking questions, you can get through the adventure and excitement of the interview with ease and contentment. With confidence and a good body posture, you can beat all other candidates and get a handsome salary package in hand. All the very best!
