Investment Banking Interview Questions

Investment Banking Interview Questions

Investment banking is an excellent career option, which provides good career development opportunities, as well as high remuneration.
Several job avenues for marketing, financial management, accounting, investment banking, etc., are available in the market. As the global economy is on the verge of recovery, revival in the jobs number is expected. Many candidates would compete for jobs at large multinationals and other companies, and would secure positions for themselves.

What is Investment Banking?

It is all about managing corporate collaborations, acquisitions, raising capital, trading securities, etc. The financial institutions that deal in all these matters are termed as investment banks and they receive most of their profits from large companies and multinationals by insuring bonds, issuing and selling off securities in markets, and rendering professional advice on collaborations and acquisitions. When it comes to interview for a position in this sector, there would be questions pertaining to your personal details, technical knowledge, global economy, etc. Here is a set of questions, that can help you get your dream job.

The Questions

Personal Round

Most people tend to have a casual attitude towards personal round, however, this is not the case with your prospective employers. Your approach towards your career and your life in general, are of prime importance to your employer.
  • Acquaint us with yourself and your family?
  • Describe some of your merits and demerits?
  • Which is your biggest achievement in life?
  • How do you deal with criticism, at work and in personal life?
  • How do you cope with or overcome failures?
  • Do you think, there's a leader in you?
  • How much do you believe in teamwork?
  • What has been the biggest failure of your life, till today?
  • Where do you see yourself 5 - 10 years ahead in your career?
  • Why did you choose investment banking as a career option?
  • What is the definition of success in your terms?
  • Except investment banking, what are the other career opportunities you are exploring in the market and why?
Industrial Knowledge Round

This is not a very tough round, provided you have done your homework on the latest industrial trends, modern methodologies, etc. It will deal with questions that address the entire industry and some questions would also check your study on the organization, where you intend to work. Therefore, ensure that you research and study the industry thoroughly.
  • What is the FTSE on today's date?
  • What are your personal views on the headlines of the Financial Times published today?
  • Where do you see the interest rates 12 - 14 months down the line?
  • Tell us about any happening of the market in the recent past.
  • What was our organization's share price yesterday?
  • Describe the current market scenario, we want to know your personal comments and views on the same?
  • Who are our latest competitors?
  • In which areas is our organization the strongest and which areas do you think, it is the weakest and why?
Technical Round

Here, your knowledge, experience, and expertise would be put to test. It involves questions pertaining to the work and terms used in the finance and investment world. Hence, go through books on investments and pick out the most important and commonly asked technical questions.
  • In what way would you calculate an organization's WACC?
  • What are the most common anti-takeover techniques?
  • Specify the main line items of a cash flow statement.
  • Distinguish between income statement and balance sheet.
  • What do you mean by deferred taxes?
  • Why do you think, two organizations collaborate with each other?
  • How you determine the firm value?
  • What are main factors affecting the corporate bond yield?
  • Distinguish between pooling accounting and purchase. Which one would you prefer amongst both of them?
  • What is the meaning of working capital and how is it determined?
  • Tell us in brief about the job description of an investment banking analyst?
  • Which is your biggest concern in investment banking?
  • If you know the net income of a firm, then how would you determine its cash flows?
  • In what way would you value an organization?
  • Tell us something about convexity and duration?
  • How do you determine the delta of an option?
  • Tell us about the difference between prepayment risk and default?
  • Give us a short description of the underwriting process?
There are many more questions that can be asked. Nonetheless, they depend upon the organization and also the specific position you have applied for.