1. Do you learn more from success or failure?
Your attitude toward both success and failure could be the difference in determining whether or not you get an investment banking job offer. Deals flop, it's part of the investment banking game. Discussing how you do a quick post mortem and lessons learned discussion, then move on to the next deal is the best approach. Learning from but not dwelling on the past is the key.
2. What is the Glass-Steagall Act?
The Glass-Steagall Act was a law that separated commercial and investment banks because of the belief that the two businesses created conflicts of interest. Banks were essentially blamed for the Stock Crash of 1929 and the start of the Great Depression.
3. What is your favorite book?
I come from a family of nutritionists, and they recommended The Wellness Revolution, a book that predicts that the sales of vitamins and other health-related items will grow to over $1 trillion annually within the next 10 years. I thought their argument for this was very interesting.
NOTE: Do not say Liar's Poker or Harry Potter. Be sure to give a truthful answer that's somewhere in the middle-appropriate for a business conversation, but not disingenuous for the sole purpose of looking good.
4. What is the biggest risk you have taken in your life?
I am conservative and risk-averse by nature. That does not mean I do not take my chances. However, when I do take chances, I base them on a rational analysis so that I can ensure success to a certain degree, and fully understand the risks involved before "taking the plunge."
While I don't have the time or resources to do them as much as I would like, I greatly enjoy traveling and scuba driving. I find other parts of the world very interesting from a cultural and geographic perspective, and would love to travel much more later on in my life. I also participate in club hockey. I'm not good! But I have met some really nice friends through the local program and I hope one day to get better at it.
6. Do you know how to perform a LBO analysis?
Equity returns (IRR or cash on cash multiples) are calculated based on the investor's entry and exit equity values. So to calculate an LBO return, you want to find out the investor's projected equity value at exit: the investor entry equity value you already know (it is the equity amount the investor is injecting to acquire the company).
7. Did you receive an offer from your previous internship?
Tell the truth here. If you did, then great. If not, then say you did not receive an offer. There are plenty of potential reasons why a company might not hire you back: Your group was simply not hiring full-time, the poor economy forced cutbacks in the hiring program, etc.
8. Tell me something about yourself that is not on your resume?
My club hockey team in college recently won the nationwide club championship that competes with 80 other colleges. This was a big success not only for the team but also for myself, because I have been successfully balancing a tremendous amount of schoolwork with interviews and practice.
9. What is your greatest accomplishment as Investment Banker?
This can be a tuition answer for some people, i.e. working hard to pay for school. Besides that, be sure to discuss any awards or academic/professional achievements you have had.
10. What kind of feedback did you receive from your previous internship?
The best way to answer this is give specific examples of times where you demonstrated attention to detail, willingness to work harder than everyone else, or a time when you helped add value to the group. These are all great to mention-simply saying you did well and had great feedback isn't enough.
11. What opportunities does a financial downturn present to financiers?
In a market where the value of assets is falling, known as a bear market, traders might consider taking short positions, that is, borrowing assets they don't own, selling them, and buying them back to return them at a later date when their price has fallen.
Meanwhile, those working in asset management or M&A might consider, or advise clients to consider, snapping up undervalued assets.
12. Why should we hire you as Investment Banker?
I believe you should hire me because as a diligent, organized, and goal-oriented person, I will work hard in any task presented no matter how difficult or time consuming it might be. I always strive to perform the best that I can. Schoolwork is a good example- when assigned a task, I organize myself and my materials in order to work efficiently, and then set to work on the task. I perform the necessary research in order to ensure that no mistakes are made, and I check my finished work repeatedly to ensure that it is high quality. I believe my 3.83 GPA can attest to this.
13. Explain our business model?
Banks provide their clients with advice, assistance in arranging financing, and other services, such as access to trading on the markets, investment management, and risk reduction. Their main source of revenue is the fees they charge their clients for these services.
Some banks have departments which invest or trade the bank's own money to generate returns, though the extent to which they can do so has become more limited in recent years.
14. Give an example of a time you had to work hard, and how you got through it?
During my sophomore and junior years of college, I was juggling schoolwork while essentially working full-time and trying to balance this with internship recruiting, making phone calls, setting up meetings and doing interviews. I was able to successfully balance all of this by keeping very organized priority sheets and setting daily goals for items to be completed. It was a difficult process, but it enhanced my overall sense of being able to do whatever was necessary to accomplish my goals.
15. When you are not working, what do you do?
Investment banking jobs involve long hours and a lot of hard work - there are simply no two ways about it. That does not mean that firms want to hire people without a personality and other interests outside of work. Highlight activities you enjoy that demonstrate risk taking, recharging and an outgoing personality. Let you personal life reflect what investment banking firms are looking for.
16. Would you prefer a product or industry group? Why?
Personally, I would prefer an industry group, simply because I think it would give me more exposure to all types of deals and investment banking products. Also, in particular I enjoyed the Technology, Media, and Telecommunications space that I worked in this summer. But honestly, I'm not too worried about what group I am in, because I have confidence that each group will offer relatively similar experience overall.
17. Why are you applying to this firm? Why GGL?
[Insert bank] is one of Wall St.'s most successful firms, with the necessary size to offer the potential for a better working environment than other firms-one that is more personable and intimate than that at the larger banks, and offers better opportunities for growth for its employees. Compared to other bulge bracket firms, [bank] seems to have a better culture from my perspective. Also, over the past few years, [bank] has been one of the few continuously successful firms-it avoided most of the catastrophe that befell Wall Street in the wake of the 2008 financial crisis-and appears to have great potential for continued success and growth. I am looking to learn more about financial services and would very much like to be a part of this firm's success.
18. What do you think you will be doing during your first year in investment banking?
Much of your answer to this question will depend on your role - so do some careful research into your chosen department.
In M&A, you might spend much of your time on financial models related to the deals you're working on, while in a trading role you might start out by assisting more senior members of the team before being given the chance to manage a trading book yourself.
Beyond that, it's important to show that you'll be keen to take on responsibilities, but that you also recognise that your first year is about learning the ropes, which usually means include following instructions from others and completing some mundane tasks.
19. How was your internship experience at Barclays?
I had a great experience with Barclays. I worked with the Consumer Retail group in Chicago, and it was a very tight-knit group: 28 professionals including the Vice President and Managing Director. Though I enjoyed the experience and I got a glimpse of a variety of deals, it did not offer the extensive network of people that New York provides. I received an offer from the Energy group, but I know that if I instead work for Goldman Sachs, I'm going come out with a network of the best and brightest people on Wall Street.
20. Describe an ethical decision you had to make?
Ethics, trust and integrity are often challenged in an investment banking job. Look at the sub prime crisis, the near collapse of the mortgage giant, Fannie Mae, and the restatement of financial accounts of several investment banking firms in recent years. It is often unethical (or even unlawful) practices that are the main contributors to situations like these. Discuss an instance when you had to make an ethical decision - what did you take into consideration? How did you finally come to a decision? These are insights into how you work and what the firm can expect from you in tough situations.
21. Why do you think you're suited to a career in investment banking?
As you're interested in a career in banking, plenty of reasons should spring to mind, and if they don't you should consider choosing another path!
Often students are attracted to the intellectual challenges and high-profile nature of the dealings of the finance world, the fast pace of the work here, and the rewards on offer, all of which are very valid reasons for applying to a bank.
But they're also valid reasons for applying for jobs in other parts of the finance world, so make sure you explain why you want a job at a bank, and in your chosen area in particular. Perhaps you're keen for the broad and deep financial training and prestigious experience that only a leading bank can offer?
Your interviewers may also ask if anything puts you off banking. If you have any real doubts, an interview is not the place to air them, but it's a great idea to show that you've considered the difficulties the industry is currently going through before choosing to make an application.
You might say that you're attracted to the particular professional challenges and opportunities a period of flux in an industry can offer.
22. Investment Banker Resume and personality related questions:
► Be ready to explain any line on your resume.
► Are you a leader or a follower? Give me an example of your being successful in each role.
► What was your favorite class so far? Why?
► What classes are you currently taking to get ready for the summer?
► What are your 5-10 year (long-term) career plans?
► What are your proudest accomplishments? What was your most challenging professional experience?
► What do you do to relax?
► Tell me a joke.
► Who has influenced you the most, besides family members?
► Say you are at a meeting with a client and your Managing Director is giving a presentation. You suddenly notice a mistake in some of the calculations, which you have prepared. Do you mention it? When? What do you say?
► What is one skill that you think is most relevant to investment banking?
► Based on your course load and work experience, you seem to like marketing. Why are you interested in finance?
► What is one word that describes you the best?
► How would your classmates describe you? How would you characterize yourself in a group dynamic?
► Highlight your quantitative accomplishments.
► Describe an ethical decision you had to make.
► If you were a vegetable, what vegetable would you be and why? (This is not a joke! This question actually gets asked.)
► What's your favorite book?
► As an Associate, what tasks would you like to spend most of your time doing? What percent of each day do you see yourself spending on those tasks?
► Describe a time that you failed. Why did you fail, and what did you learn?
23. What's the difference between investment banking and commercial banking?
An investment bank offers advisory services in M&A and other corporate transactions, and also acts as an intermediary between investors and companies in need of capital. Commercial banks work more on the monetary/transactional side, where they take deposits from clients and lend money to individuals and insitutions.
24. Give an example of when you failed or made a mistake?
During my last internship I had to help out another intern. I taught him some concepts incorrectly because I was rushed, and I made the incorrect assumption that he would figure it out. He didn't and that friend had to quit the internship program. We were very close, and it was devastating. I felt responsible. From that experience, I learned that I had to take being a leader much more seriously, and that my example was crucial for others to succeed. I also learned that I must show better attention to detail and not assume everything is running well without my input.
NOTE: Really think this one out and give a truthful answer. Again, this is another "weakness question." Where possible, explain what you've learned from it and how you can improve.
The advantage of equity finance for a company - raising money by selling shares - is that this money does not have to be repaid. However, new shareholders usually get to have a say in how the company is run.
Despite these rights, equity is often seen as a risky choice for investors as they will lose all their money if the company doesn't prosper. If it does well, on the other hand, they may see their stake multiply in value many times over.
Debt finance - money raised through loans - must be repaid eventually by a company, usually with interest, but lenders won't be able to exert as much influence as shareholders over how the company does business.
The debt of a reliable company is usually seen as a safe investment, but fixed repayment schedules means that there are few opportunities for large returns.
26. What are your 3 greatest strengths you have as Investment Banker?
► Hard Worker: I am a very hard worker-I like to do what it takes to get the job done. I like to lead through example, and even when the overall hours are going to hurt, I'm definitely not someone that's going to complain.
► Attitude: I have a positive attitude. I enjoy working with other people and am courteous and fun to be around. Within investment banking, I know what I'm getting myself into and know that the hours are going to be tough, but I'm definitely a person that doesn't complain and will be fun to work on a deal team with.
► Networking: I try to build my network of business contacts every time I have the chance. I'm smart enough to know that there is always something important to learn from others.
27. Why investment banking? Why do you want to work at our bank?
In your response, highlight that investment banking is a very competitive and lucrative area, offering tremendous growth opportunities. Talk about the latest industry trends and how they impact businesses in the bank's specialty. Talk about the opportunities presented recent mergers and acquisitions and the challenges due to by the sub prime crisis. Has Lehman Brothers responded appropriately? What are your thoughts on JPMorgan and Bear Stearns? Be prepared to discuss the firms on the front page of today's Wall Street Journal.
You need to convince the interviewer that you have the necessary drive, capabilities, and personality best suited to become a successful investment banker. Gaining the trust and respect of the recruiters is very important for cracking these interviews. Talk about the company's position in the industry and how it differs from that of other Wall Street listed firms - both bulge bracket and boutique.
28. Why do you want to work for this Bulge Bracket Bank?
I like the prospect of getting the exposure to many professionals, industries, products, and concepts in a bulge bracket firm. I know that in that environment I'm going to get access to the best learning experience possible. Also, I like how (this particular bank) has both a more casual and entrepreneurial environment than many other banks. I also think that being in an Industry group, I will be able to get more exposure to a multitude of products. This is an important consideration for me.
(IMPORTANT RELATED NOTE: Make sure you know about the culture and philosophy of the bank you're interviewing at! You want to express that you understand the firm/group's view on this idea, and that with them you'll be "working for the smartest people in banking, who will challenge you to learn more.")
29. How much do you read? What do you read?
The types of books and magazines you read reflect your personality and highlight your passion for the industry and the finer things in life (why else take an investment banking job?).The Wall Street Journal and your industry specific trade magazines must be on your list. Also include other readings that show you are not one dimensional in your interests.
30. Tell me what do you think an analyst does on a typical day?
Analysts do what they're asked to do. They are at the bottom of the Investment Banking hierarchy, which is very rigid. Like in the military, there is a chain of command that you need to fall into to be successful.
Analyst responsibilities can vary from running financial models or pitch books independently, to the most minuscule of duties including making copies and setting up conference calls. A typical day for a highly-sought analyst can be simply categorized as: doing whatever makes their Associate's/Vice President's/Managing Director's life easier.
Communication, leadership, problem solving, and working under pressure are the key skills in an investment banking job. You should highlight that you are flexible enough to adopt new styles and methods of functioning, while being willing to work as part of a bigger team.
Talk about your core competencies and how you used them to achieve measurable results at a previous job or during your education. Discuss your failures, how you handled the situations, and what you took away from them. Whenever possible, talk about deals you've participated in. There are few things than interest an Associate or Senior Vice President more than deals.
32. With what other banks are you interviewing?
Interviewing is about marketing yourself and you do want to give them impression that you are desired by other banks. On the other hand, you don't want to lie. Always keep in mind that banking is a small industry where bankers know bankers at other banks. If you are interviewing with other investment banks say so. If they are prestigious or comparable to this firm, name them. If they are less prestigious, then just mention that you are interviewing with "a number of boutiques." If they ask you to name them, then mention one or two. If you have no interviews lined up, state that you are "talking to a number of banks" and try to move the conversation along.
33. Describe some risks you've taken. How did you make the decisions?
An investment banker's job often involves tough decisions, keeping in mind the political changes, various macroeconomic variables and the market trends. The ability to take risks is important. You need to demonstrate adequate analytical skills and how they were used in managing risk associated with a particular deal. You should highlight the logical assumptions and calculated guesses made by you while undertaking a risky project or decision. In an investment banking career, it is often more about being "roughly right" than "precisely inaccurate."
34. What are your strengths as Investment Banker?
This is one of those generic interview questions that you are less likely to get in banking interviews. If you do get this question, this is one of your best opportunities to make your case that you'd be a good banker. Some of the skills that you probably want to highlight include your analytical/quantitative skills (especially for an Analyst), communication skills (especially for an Associate), ability to learn quickly, detail orientedness and ability to work really hard. You should definitely be prepared to back up what you state as your strengths, using one or two concrete examples from past jobs or school.
35. What value is our stock trading at? Trading volume compared to bulge bracket firms?
Before going for an investment banking interview, go through the financial profiles of the bulge bracket firms and identify the highlights. Be aware of the rankings of the investment banking firms in various segments, such as advisory services or asset management. Stock movements are often a reaction to the latest happenings and have less to do with the company's fundamentals. Study the recent stock price movements and be ready to answer questions related to a sharp movement in the share price or jumps in trading volume.
