“Do your homework” is one of the best pieces of advice anyone can give to a candidate appearing for an investment banking (IB) interview. If you follow the advice, you will have the confidence and the knowledge to face the interviewer confidently. You can tackle the interviewer’s questions, which can be broadly classified as qualitative (“soft”) questions and quantitative (“hard,” technical) questions.
Here, we look at a sample of questions that have been used at interviews. They may help you prepare. Forewarned is forearmed, as they say.
Take me through your CV. Tell me about yourself.
This is a deceptive question, as you may feel that the interviewer wants you to freely talk about yourself. But unless you can link one of your interests to your role, you won’t be able to maintain the interviewer’s attention. For example, if you’re a scuba diver, you should relate your hobby to your quality of being able to follow rules and work with others.
Why did you choose your university/major? What were your grades each year at university?
Education questions try to find out whether you were oriented towards the finance services field from your university days and whether you have been a good performer consistently. So, show that you were inclined to entering the field
right from college.
I see that you have a 2.8 GPA; we typically hire 3.5 and above. What happened?
If you have a low GPA, you obviously received the interview invite for some good things in your résumé. Use them to your advantage, and also say why you did poorly for some time (personal issues?) and how you improved by working hard after you had solved your issues (see Ref. No. X).
We usually go for candidates from Ivy schools. You’re from a non-core school? Why should we select you instead of someone from an elite school?
You could say that being from a non-core school motivates you to work harder to prove yourself. It gives you a competitive edge. If circumstances had forced you to choose a non-core school for its lower tuition fee, or if you had to support yourself during college, you should say this. If you have been employed at an IB earlier and have a good track record, refer to that to show you’ve come a long way. But be humble and confident and don’t come across as brash.
What are your greatest strengths/weaknesses? Do you learn more from success or failure? What’s your proudest accomplishment? Who or what influenced you the most?
Personality questions try to find out about your personality pluses and minuses, whether you’re capable of introspection, and whether you can lead and also work in a team. They try to find whether you can pick it up and move on after a failure, as some or more IB deals are bound to go wrong. Your accomplishments and your influencers also tell a lot about you. So do your career and personal plans.
Where do you see yourself in five/ten years? What do you do in your spare time?
You should show commitment, but you should not sound as if you want to stay in IB until retirement. Analysts, typically, stay in IB only for a few years before moving on. But if you’re an MBA looking for an associate’s role, it might pay to show at least some medium-term commitment to IB.
What do you do in your spare time? What book did you last read?
In seemingly innocuous questions about your hobbies and interests, your interviewer will try to find out your personality traits. Give honest answers, and don’t try to impress the interviewer. If you’ve read a book that’s suitable for discussion at a business meeting, talk about it. But don’t say you’ve a read a book that you’ve not read, and don’t try to talk about a book just because it would make you look bright.
Why should we hire you? Why do you think you’re a better candidate than others? How can you add value?
This is a good time for you to bring up something that makes you unique. For example, if you have been doing summer internships for the past five years, be it as a petrol station attendant or an assistant to an accountant, say so.
What is your attitude to risk? How do you make your decision?
An investment banker has to take tough decisions often and take risk. Are you comfortable with taking risks? If you’re risk-averse, do you try to arrive at a rational decision before taking the plunge?
Describe an ethical decision you made? How do you maintain ethics, trust, and integrity in your professional life?
Unethical and unlawful practices are what led to the subprime crisis and earned banks the wrath of investors. So you should expect this question. Scan your own experiences to find out an instance where you would have profited at another person’s cost, but your values helped you to do the right thing.
How do you think you will manage 18-hour days and weekends at work?
Given your personality, will you fit in with the work culture? Show evidence of your character. For example, if you have completed a half-marathon for a charitable cause, talk about it to show your tenacity and commitment to complete a task. How do you find the motivation? Also think of what to say about achieving work-life balance.
Tell me about a time when you missed an important deadline or faced another challenging situation. Can you talk about a time when you successfully introduced a new idea to a group?
Use your experiences from university, work, or leisure activities to demonstrate qualities of motivation, resourcefulness, courage, and persuasiveness.
What is your biggest weakness and how do you deal with it? What is more important in business: IQ or EQ? Are you smart? Suppose your boss is making a presentation to a client, and you suddenly find you’ve made some mistakes in calculations. What would you do?
There are no right or wrong answers. The questions are intended to evaluate the candidate’s soft skills and personality fit in the firm, whether they can expand their ideas, whether they can deal with ambiguity, and whether they show maturity.
An instance where you have shown leadership/teamwork?
To the leadership/teamwork questions, you could give an instance where you were elected or appointed as a team captain and where you took an initiative to help a colleague or friends solve a problem.
Why do you want to be an investment banker, rather than a management consultant or a sales and trading professional? Why have you chosen this bank/division specifically? What value is our stock trading at? How does it compare to bulge bracket banks? What other firms are you interviewing with and why? What other career options are you pursuing besides IB?
The interviewer is trying to assess how serious you’re about IB and about working for the bank/division. Research the bank and division and try to find out specific qualities that make it different from others. What’s it about this bank that makes it special for you? Get an idea about the bank’s performance numbers from its website.
What was your experience working for or doing internship with XYZ bank? Tell me about a deal you worked on.
You can expect this question if you have worked for or interned with another IB. Include the pluses as well as the minuses without putting down your previous employer. The interviewer may be very much interested in finding out your experience at your previous IB and a deal in which you participated. But mention the deal in your résumé only if you feel you know everything that went on in the deal process that you could have known from your level in the hierarchy.
What was the feedback after your internship?
Give concrete examples of your qualities that were noted, such as attention to detail and willingness to work harder than others, rather than giving a vague reply, “The feedback was very good,” without explaining.
Did you receive an offer?
Tell the truth. If you didn’t get an offer, say so, as there may have been a reason: for example, the IB group you worked for was not recruiting.
What does this division do? What are the responsibilities of the position you are seeking? How can you be successful?
Again, the key is research. Know the position you’re applying for thoroughly. Read the profiles of the leaders in the field and in the bank/division to learn about how they achieved success.
Tell me about a recent news item about this bank or about one that might affect it?
What is the best way to invest $100,000 now? How has the financial crisis affected this bank?
Look up recent news about the bank. Go to its website to find out about its strategies and policies.
Why would an investor be ready to pay more for one company than for another?How do you value a company? What is risk? What is typically higher: the cost of debt or the cost of equity? What does WACC, DCG, and CAPM stand for/mean? What is the difference between commercial banking and IB, or between enterprise value and equity value? What is “beta, “goodwill,” “swap”? What is accretion and dilution?What is the Glass-Steagall Act? And many, many more.
Technical questions evaluate the candidate’s technical knowledge of finance, accounting, financial modeling, valuation, etc. Not just finance graduates, even liberal arts graduates can be expect to be quizzed, though the latter may be expected to know only basic concepts.
Answering technical questions won’t make you stand out among other candidates, most of whom would answer these questions well anyway. No sample can cover even a small percentage of possible questions.
In any case, brush up on your financial knowledge. Go through a glossary of terms for the field (Google it). For contextualizing the terms, see The Financial Times or The Wall Street Journal. Knowing the job responsibilities also help.
If you rolled four dice, what is the probability of getting the number 4 on each?
What is the angle between the hour and minute hands at 12.30 pm?
How many hairstylists do you estimate are there in this city? Explain your logical assumptions.
If you were a vegetable, what vegetable would you be and why?
How many weddings are conducted every year in China?
Interviewers are known to ask bizarre questions to challenge candidates or to assess their problem-solving ability and critical thinking. To tackle such a question, consider it carefully, ask clarifying questions, and speak about the steps you would take to answer the questions.
What questions do you have for me?
Prepare a minimum of two quality questions per bank and a maximum of four or five to put to your interviewer. Of course, here, again, it’s you who’re going to be assessed, not the interviewer, although you’re asking the questions. You shouldn’t be offensive, but the more challenging questions you ask, the higher will be your interview grading.
What are the firm’s growth strategies? How will you achieve your targets? You have successfully completed many deals, but there was a recent news report about a deal gone bad. How much did it impact the bank? How does the bank handle a setback?
You may ask about the interviewer’s own career and career choices without sounding unpleasant or pushy and overconfident. Your interest in the bank and the job/career should come through in your questions.
What led you to build a career in IB? What were your inspirations? How long have you worked here? What do you like best or dislike the most about the bank, and how does it compare with others? Can you tell me about a favorite deal you’ve worked on at the bank? Can you describe your typical day at work? How do you maintain work-life balance? Describe you first year at an IB/at this bank?
More targeted questions about the job you’re applying for can give you helpful information.
What differentiates a good analyst/associate from a great one? Can you tell me about your training programs for analysts/associates? What are the basic requirements for an analyst/associate job? What would prepare me for an IB career? How does the state of the economy affect the prospects of this job/career? What are the industry groups available here?
How are the hours like here (look for other sources for this information)? What salary can I expect? Perks? What do you plan to do after banking?
– Top investment banks in the world
– How to get a job on Wall Street after college
– Investment banking vs management consulting: Which is a better career choice?
– How to become an investment banker
References: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20