Tag Archives: interview tips

What Questions to Ask in an Investment Banking Interview?

I found the following information in the Wetfeet Insider Guide to Careers in Investment Banking. This post follows on from my previous post on Investment Banking Interview Questions and Tips.

The following are good generic questions that will fit most investment banking interviews. However, you’ll want to think of additional ones that apply specifically to the company with which you’re interviewing. One important reminder: If you’ve already covered any of this material in your interview, don’t revisit it. You’ll appear inattentive and unfocused.

A word to the wise: We’ve grouped our questions according to our sense of relative risk. Those in the “Safe” section are meant to be boring and innocuous, while those in the “Well Done” section will help you put the fire to your interviewer’s feet.

Safe Questions

  • What kind of person are you looking for? (This question will provide useful information on personal characteristics you should emphasize.)
  • What makes a person successful in this business?
  • What made you choose this firm over other firms?
  • What is a typical career path in the (corporate finance, sales, trading, research) department?
  • How much of an analyst/associate’s time is spent pitching new business?
  • Is there a formal mentoring program for new analysts/associates?
  • If I’m a CEO, why would I choose your firm to take my company public?

Medium

  • Beyond the league tables, what differentiates your firm from other firms?
  • How is an analyst/associate assigned from the generalist pool to a project?
  • How long does it take most people here to become managing directors?
  • Can one request specific teams, industries, or product groups?
  • How well do the firm’s different divisions work together?
  • What’s the path? Are there specific benchmarks you have to hit?
  • What are the firm’s biggest challenges and opportunities in the next 2 years?
  • What aspect of your job do you find most frustrating?



Well Done

  • How has increased consolidation in the industry affected your firm, both positively and negatively?
  • If the company has merged: What new business has resulted from the merger? How well have the two cultures mixed?
  • How would your firm fare relative to the competition if interest rates suddenly skyrocketed? If oil prices plummeted? (Or whatever else you can think of along these lines, to help you gauge how prepared the firm is for future possibilities.)
  • If the company has not merged: Do you think the company needs to acquire or merge with a competitor in the near future?
  • How committed is the firm to building its XYZ business? (Investment banks are known to eliminate entire departments when they underperform against expectations, and if you happen to work for one of those departments, that is not usually good news..)
  • What percentage of the managing directors are female or minority?

Investment Banking Interview Questions and Tips

Practising investment banking / finance interview questions will be crucial in order to distinguish yourself from the next commerce / law graduate with first class honours who probably has a very similar resume to yourself.

How to get into investment banking

Whilst I do not speak from experience, I hope the following investment banking interview questions and tips which I have pulled together from research across the internet will help graduates considering a role in investment banking. I query whether now (mid 2008) is the most ideal time to be jumping into investment banking but I’ll get to that another day.

Expected Investment Banking Interview Questions

Ultimately, investment banking interviewers want to know two things regardless of the role you are applying for:

1. Why do you want to go into the investment banking?

2. Why do you want a job with the particular firm you are applying for?

From my analysis of a couple of insider surveys done by Wetfeet, the key is to be prepared by having thought well about these questions before the interview. Research into the firm and where the banking division (trading / M & A /advisory / etc) is placed comparatively to its competition (League tables) is a good place to get started when thinking about these questions.

However, to stand out, originality and some degree of understanding of the culture of the firm would probably be required to differentiate you from the talented competition.

Investment banking interviewers will be looking for different skill sets depending on the type of investment banking job you’re pursuing. Types of Investment Banking jobs can be seen in my post what is involved in a career in investment banking.

“One insider who worked in corporate finance after college and pursued a sales position after business school observes that in her corporate finance interviews, the recruiters focused on her analytical skills and experiences, while her sales interviews were more weighted toward evaluating her people skills, particularly those related to negotiation, relationship building, and persuasion.” Wetfeet Insider Guide to Investment banking


Common Investment Banking Interview Questions

Being prepared for the following questions will give you the best chance at performing in the interview:

  1. What most excites you about a (corporate finance, research, sales, trading) job?
  2. What can you tell me about a couple of stocks that you follow?
  3. Why do you want to work for this bank versus our competitors?
  4. Who is our competition (in the major categories)?
  5. Tell me about your leadership experience…
  6. Tell me about a high-stress situation you’ve been in. How did you handle it?
  7. What could you do better the next time?
  8. What did the stock market do last week?
  9. The Fed recently lowered interest rates. Do you think the move will be sufficient to stimulate the stock market? Why, or why not?
  10. In which areas is our firm the strongest? The weakest?
  11. What other banks are you interviewing with?
  12. What career opportunities are you exploring other than investment banking?
  13. Sales/trading: Pretend that I’m a portfolio manager for Investment bank A. Explain to me why I should buy the latest IPO the firm has underwritten…
  14. Research: You’ve just been hired as our firm’s new finance industry analyst. In 2 weeks, you’re scheduled to address a growth-stock conference on industry trends. How would you prepare?
  15. Corporate finance: In a merger discussion, ABC Systems says Magnatech is worth $23 per share; Magantech says $34 is more in the ballpark. Who’s right, and how would you arrive at a valuation?

Investment Banking Interview Tips

Finally, following the following tips likely prove useful depending on the role you are applying for:

  1. Be prepared to be able to explain how to value a company
  2. Be prepared to work with a few numbers in the interview
  3. Be prepared to promote your individual advantages as opposed to the next interviewee (speak other languages, finance experience, successful investing history, people you know within the firm and hence cultural fit)
  4. Be honest
  5. Focus your skills and experience towards the particular role you are applying for (eg, a career in Mergers and Acquisitions required different skills to a career in sales and trading)

I hope the above information helps you in your path to becoming an investment banker! If its not for you, try my post on Law firm summer clerkship tips, resume advice and law firm career site links.