INVESTMENT BANKING INTERVIEW QUESTOINS AND POSSIBLY ANWSERS.
I. Behavioral Questions
1. Tell me about yourself.
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Answer: Provide a concise summary of your background, academic
achievements, relevant experiences, and a tailored reason for your interest in
investment banking.
2. Why do you want to work in investment banking?
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Answer: Emphasize your interest in challenging environments, exposure to
financial markets, and passion for deals and client interaction.
3. Why our firm?
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Answer: Reference the firm’s culture, recent deals, and unique aspects like
training programs or mentorship initiatives.
4. What makes you a good fit for this role?
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Answer: Highlight analytical skills, work ethic, and ability to thrive under
pressure.
5. What’s your greatest strength?
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Answer: Mention qualities like attention to detail, team collaboration, or
ability to learn quickly.
6. What’s your biggest weakness?
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Answer: Share an area of improvement, followed by steps you've taken to
improve it.
7. Tell me about a time you handled a high-pressure situation.
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Answer: Use the STAR method (Situation, Task, Action, Result) to explain.
8. Describe a time you worked on a team.
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Answer: Highlight your role, how you collaborated, and the outcome.
9. How do you handle constructive criticism?
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Answer: Share an example of receiving feedback and using it for selfimprovement.
10. Tell me about a challenge you faced and how you overcame it.
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Answer: Focus on your problem-solving and resilience.
11. Why did you choose your major?
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Answer: Connect your studies to your interest in finance or banking.
12. What motivates you?
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Answer: Focus on goals, learning opportunities, or making an impact.
13. How do you prioritize tasks when working on multiple projects?
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Answer: Mention tools like to-do lists and structured planning.
14. Tell me about a time you failed.
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Answer: Share what you learned and how it changed your approach.
15. Walk me through your resume.
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Answer: Highlight key experiences, achievements, and transitions.
16. What is your leadership style?
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Answer: Mention collaboration and adaptability.
17. What is your proudest accomplishment?
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Answer: Choose a relevant example tied to finance or teamwork.
18. Where do you see yourself in five years?
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Answer: Show ambition but align with the firm’s goals.
19. Why should we hire you?
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Answer: Summarize skills, experience, and cultural fit.
20. Describe a time you showed initiative.
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Answer: Focus on identifying a problem and proactively solving it.
II. Technical Questions
1. Walk me through a DCF.
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Answer: Explain the key steps: projecting free cash flows, discounting them,
and calculating terminal value.
2. What is the formula for WACC?
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Answer: WACC = (E/V) * Re + (D/V) * Rd * (1 - Tc), where E = equity, D = debt,
V = total value, Re = cost of equity, Rd = cost of debt, Tc = tax rate.
3. How do you calculate Enterprise Value?
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Answer: EV = Market Cap + Debt - Cash + Minority Interest.
4. What are the three financial statements?
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Answer: Income Statement, Balance Sheet, Cash Flow Statement.
5. How do the three financial statements connect?
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Answer: Net income from the income statement links to retained earnings
on the balance sheet and the starting point of the cash flow statement.
6. What is EBITDA?
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Answer: Earnings Before Interest, Taxes, Depreciation, and Amortization—a
proxy for cash flow.
7. What is leverage?
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Answer: The use of borrowed funds to increase potential returns.
8. What is the difference between Equity Value and Enterprise Value?
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Answer: Equity Value is for shareholders; Enterprise Value includes both
debt and equity investors.
9. How do you value a company?
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Answer: Using DCF, comparable, precedent transactions, and LBO analysis.
10. What is accretion and dilution?
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Answer: Accretion increases EPS post-merger; dilution decreases it.
11. What are precedent transactions?
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Answer: Valuation based on prices paid for similar companies in past M&A deals.
12. What is a leveraged buyout (LBO)?
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Answer: Acquisition using significant debt, where debt repayments are covered by
cash flows.
13. How do interest rates impact valuation?
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Answer: Higher rates increase discount rates, reducing valuations.
14. What is the difference between book value and market value?
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Answer: Book value is accounting-based; market value is current stock market
valuation.
15. What is a synergy?
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Answer: Cost savings or revenue enhancements from a merger.
III. Market/Industry Questions
1. What’s a recent deal you followed?
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Answer: Mention the deal, key players, valuation, and your analysis.
2. What is happening in the stock market right now?
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Answer: Share insights on trends, indices, or sectors.
3. How do rising interest rates impact banks?
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Answer: Explain effects on lending margins and valuations.
4. What’s the difference between a stock and a bond?
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Answer: Stocks represent equity; bonds are debt instruments.
5. Explain the impact of inflation on investment banking.
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Answer: Discuss implications for deal flow, valuations, and financing.