Investment Banking Interview Questions

There are four investment bank interview questions that every candidate should prepare for. You will almost certainly be asked each one, for more or less every interview you attend, so it is well worth taking some time to familiarise yourself with possible question variations and of course, model answers.

The four most common investment banking interview questions are:

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Other Investment Bank Interview Questions

Below is a list of other questions that regularly come up at investment banking interviews.

Career Questions

  • What other firms are you interviewing with and why?
  • Are you interviewing with management consulting firms too?
  • What career opportunities are you exploring other than investment banking?
  • What are the most important qualities for a career in investment banking?
  • What do you understand the responsibilities of an analyst to be?
  • Describe a current event in the market?
  • What is your most challenging professional experience?
  • What would you do if you were giving a presentation to a client and suddenly noticed a mistake in some of the calculations, which you had prepared?

Education Questions

  • What were your grades each year at university?
  • Why did you choose your university?

General Questions

Competency Questions

  • Are you a leader or a follower? Give examples.
  • Describe an ethical decision you had to make?
  • Describe a time you failed. Why did you fail, what did you learn?

Finance Questions

  • Why would two companies merge?
  • What major factors drive mergers and acquisitions?
  • What are some common anti-takeover tactics?
  • Why might a company choose to issue debt vs. equity?
  • What could a company do with excess cash on the balance sheet?
  • How would you calculate a firm's WACC? What would you use it for?
  • How do you calculate the firm value for the following firm?
  • What would greater impact a firm's valuation: a 10% reduction in revenues or 1% reduction in discount rate?
  • What major factors affect the yield on a corporate bond?
  • Walk me through the major line items of a Cash Flow Statement.
  • Say you knew a company's net income. How would you figure out its cash flows?
  • What is the difference between the balance sheet and the income statement?
  • What is goodwill? How does it affect net income?
  • What is the difference between Purchase and Pooling accounting? Under what circumstances would you use one or the other?
  • What are deferred taxes? How do they arise?
  • What is working capital? How would you calculate it?

Industry Questions

  • What was our firm's share price yesterday?
  • What is the FTSE at today?
  • Which way is the market going? Bond, equity and foreign exchange?
  • Where do you think interest rates will be in the next 12 months?
  • What has happened in the markets in the past three months?
  • What were the headlines in the Financial Times today?
  • What would you personally invest in?
  • What industry do you follow and what numbers do you look at to determine if a firm is doing well in the industry?

Investment Banking Questions

  • Why have you chosen to work in investment banking rather than management consulting?
  • How does your past career qualify you for a position in investment banking?
  • What department do you want to work for inside investment banking and why?
  • Who is in the bulge bracket?
  • If you were the CEO of our firm, what major changes would you implement?
  • Describe a typical day of an investment banking analyst?
  • What is your greatest concern about investment banking right now?

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