Top 10 Investment Banking Job Interview Questions
An investment banking career provides great challenge, a chance to learn the ins and outs of corporate finance, and develop analytic skills that are useful in any business field. Investment bankers, with firms such as Goldman Sachs, Blackstone Group and Morgan Stanley, act as a link between the corporate world and the investor, whether an individual or an investment fund. This sector offers excellent job opportunities for hard working finance students and professionals who are ready to face the challenges provided by globalization and consolidation.
Before going for an investment banking jobs interview, be sure that you have done your homework and can respond to the toughest questions that aim to judge your analytical and other skills and your attitude towards risk. Count on the standard questions like, your greatest strengths and weaknesses and “tell me about yourself.” Beyond those types of question, there are some questions commonly asked in an interview for an investment banking job.
Investment Banking Job Interview Questions
1. 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.
2. 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.
3. Walk me through the high points and low points in your resume. What were your greatest accomplishments and challenges?
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.
4. 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.”
5. 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.
6. Why should we hire you?
Be ready for this one. Be confident but not cocky. Highlight that you are the right candidate because you can hit the ground running and are flexible enough to move with the changing environment. The core competencies essential to an investment banking career are: problem solving ability, professional attitude with willingness to adapt and remain flexible, leadership and communication abilities, resourcefulness and the drive to succeed.
7. 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.
8. 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.
9. 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.
10. What questions do you have?
Count on this one and have several pointed, challenging questions prepared. Ask about the firm’s growth strategies and particular specialties. Discuss a recent news report about a particular deal done or lost. Don’t be afraid to ask a personal question of the interviewer as well; nothing offensive but something but, rather, something that prompts them to think about their own investment banking career choices.
If you’ve landed an investment banking job interview, being prepared for these questions should put you on solid ground and get you one step closer to the offer you are looking for.
If you would like to find an investment banking job opportunity, you could look at the numerous investment banking jobs available. You can do this by browsing sites like Job Search Digest. You can also get in touch with leading executive search consultants for details of current vacancies. www.JobSearchDigest.com provides its members with a database of niche investment banking recruiters.