An investment banking job can be one of the most rewarding jobs in the world, both from a financial standpoint and a psychological one. Here, we will attempt to guide you through how to ace an investment banking interview questions and answers. Keep in mind however that interviewers can always come up with questions designed to throw off the person being interviewed.
Being well prepared for the investment banking interview is good, but being overly prepared is not advisable, as it may lead to stumbling on your words, or worse, come through as not very enthusiastic and can give the impression that answers have been repeatedly rehearsed and do not come from extensive personal knowledge, something that will be very easily picked up by the interviewer. Stay relaxed and confident instead of being overeager and your chances of success will be heightened.
Investment banking is just as much about relationships as it is about financial matters, as you will be interacting with some of the most demanding and knowledgeable people in the world, the CEOs and the most highly placed executives, who are used to achieving whatever they want.
Hereby are some of the most common areas covered in an investment banking interview questions and answers, put forth in chronological order:
- Educational Background and Work Experience: Having you walk through your resume is standard procedure, and if coming from a different field of work other than finance or accounting, it will be nesessary to use a convincing approach as to why the change is desired. The world of investment banking is rarefied indeed, and inclusion into this exclusive club is not just a matter of answering that you like the money to be made.
- The Fit: Senior investment bankers will most likely focus on this issue, since working as a team is one of the requirements for a successful career, with analysts sometimes leading the way, then investment bankers making the pitch to large groups of potential clients. A common question is why you picked their firm to apply to. Homework performed on the firm is crucial, with knowledge of the particulars of the firm, including its history, potential future direction, current officials, and more importantly, any recent developments affecting the firm will show a firm grasp of current events.
- Technical Questions: This is where you can showcase your strengths, for example by knowing where the Dow, the Nasdaq, or the Russell 1000 closed on the previous day, showing commitment to the field of investment banking. Know of at least one stock you like and why, with your answers solidly based on specific items of relevance. For example, if using Apple, do not just say that you like the products that they have, elaborate on their strengths. Definitely brush up on your accounting knowledge, especially areas that are pertinent to the financial field, such as WACC, APV, EBITDA, CAPM, even very simple things such as 10K or 10Q.
Investment bankers are generally blamed for the global economic crisis, so ace your investment banking interview questions and answers, as it will probably take an investment banker to lead the world out of its present predicament.