From the monthly archives:

January 2014

In addition to the expected questions about your background, why you want to get into the industry, and technical knowledge, there may also be questions about ethical decisions you’ve had to make. Ethics, trust and integrity are often challenging in an investment banking career. 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. Often unethical (or even unlawful) practices are the main contributors to situations like these.

You may be asked to 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. There may be a set of “behavioral” questions designed to reveal your character, your values, and how you would handle other difficult situations. These can be some of the trickiest to answer. If you can link your answers to specific example in your resume or background, it adds more credibility to your answers.  Here are some examples of the types of questions you may be asked to answer:

  • What personal accomplishment are you most proud of?
  • What are your weaknesses (experts suggest never mentioning more than two)?
  • Tell me about a time when you failed. How did you respond?
  • Do you prefer to work on a team or alone? If you prefer teams, what role do you prefer to have in a group or team?
  • Tell me about a big risk you have taken in your life and how you went about it.
  • Walk me through a situation that didn’t go your way. How did you react?

Overall, you want to prove to the interviewer that you can work extremely hard over long periods of time, and that despite the long hours, you are detail-oriented and do not make mistakes. You need to show that you love the investment banking industry and finance in general. If you can back up these claims with accurate and specific examples from your background as proof, then you’ll have a much better chance at acing the interview.

For example, to prove how hard you can work, perhaps talk about a small business you started that required 100 plus hour work weeks, or a political campaign that required months of work, seven days a week. For attention to detail, mention a real-world example where a single mistake would have been noticed by thousands of people, such as editing a publication or a high-traffic website. For passion about the industry, you might mention your own investment track record or a particular industry which you follow closely and have in-depth knowledge.

It is easy to find extensive list of possible investment banking job interview questions using a Google search. Additionally, entire books have been written about interviewing for an investment banking job. It would probably be a good investment to purchase one to learn some of the proven answers to many of these questions and to build your notebook of polished answers.

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Investment banking job interviews can take many directions. One thing is for sure, your logic and quantitative abilities will be tested. Here is a common question that asks the candidate to dip their toe in the water – so to speak.

Q: You start with a single lily pad floating in an empty pond. If that pad grows and the surface area of the pad doubles every day, it will take 30 days to cover the entire surface of the pond. If instead of one lily pad you start with eight lily pads (each identical in characteristics to the original lily pad), how many days will it take for the surface of the pond to become covered?

A: The trick here is to figure out the relationship between …
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