Investment banking job interviews are known for being among the most grueling in the industry. You can’t expect to make it to the second round without preparing extensively. So before going to your investment banking job interview, make sure you’ve done your homework, learned about their firm, and prepared answers to at least the top 20 questions you’re likely to be asked.
Start with the standard “tell me about yourself” questions. Be prepared to highlight key sections of your resume. Why do you want to be an investment banker? Why this particular bank? Be prepared to talk about why, despite the recent financial crisis and tarnished image of the industry, you still feel investment banking is the ideal career. Be familiar with front-page news in recent issues of the Wall Street Journal and how they impact the industry.
You need to convince the interviewer that you have the necessary drive, capabilities, and personality to become a successful investment banker. Gaining the trust and respect of the interviewer is very important for cracking these interviews. Talk about the company’s position in the industry and how it differs from other Wall Street firms – both bulge bracket and boutique.
You’ll need to brush up on your investment banking basics to prepare for the technical questions about investment banking, such as:
-What is a DCF? How do you calculate one?
-What is an interest rate swap?
-How do you value a firm?
-How do you determine if a stock is undervalued?
-How do you set the price for stock in an IPO?
-What is the difference between a commercial and an investment bank?
-What are the three main valuation methodologies
-Which one of them is like to result in higher or lower value?
-Why would one company want to acquire another? For what reasons and outcomes?
Then there will be a few questions designed to determine how well you’ll fit in with the organization. These questions have less quantifiable answers. They include:
-What type of supervision do you prefer?
-How would your closest friends describe you?
-What are your hobbies or outside interests?
-What was one of the most important events in your life? Why?
-Who are your heroes?
-What is your 5-year goal? Your 10-year goal?
-What was the last book you read?
-What challenges you?
Next time, we’ll look at other types of questions a typical investment banking interviewer may throw at you.