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Investment Banking Interview Process

Investment Banking Interview Process

The Job Interview Process

Interviewing for a job with an investment bank is a special kind of hell, but it’s one that portends the intensity and pressure of actually working at an investment bank. While the interviews do vary some from bank to bank, you can expect the process to follow this essential outline. (Check out our best job interview tips.)

The Early Rounds

Landing an interview just means you have joined herd. Don’t congratulate yourself just yet, as most investment banks have multiple rounds of interviews designed to thin out the weak.

Round 1

Depending on your location, your first interview will likely be a phone interview. Many banks also send various alumni to make the rounds on their old college campuses for in-person, speed-dating interviews. These early interviews are usually focused on technical questions—you need to show you know the basics.

Round 2+

Sometimes, but not always, there’s a second round of phone or in-person interviews—this is normally the case for larger college campuses with an established pipeline to Wall Street. Again, these interviews are meant to cover the basics around valuation, discount rates, cash flow, and other common topics.

On-Site Interviews, a.k.a. Superday

If you make the cut, you’ll be invited to an on-site Superday at the investment bank/s. You’ll be put up at a hotel along with dozens of other candidates for an intense round of interviews the following day.

There is normally a small reception or outing the night before for the interviewers to meet the candidates informally. Consider this a serious part of the interview, as initial hiring decisions may be made during these events. Making a good impression is a must!

Superday will be an all-day affair, so do your best to get plenty of sleep, as you’ll need all of the focus and stamina you can muster. You’ll spend the entire day meeting with different hiring groups, even if you’ve already indicated a group or practice preference previously.

Some firms use a match process to hire associates. At the end of Superday, you’ll rank the groups you interviewed with and they’ll rank you. If there’s a match, you’ll be hired. Other firms just hire directly from the pool of candidates.

The interviews can be one-on-one or with small groups and the questions will be all over the place.

Interview questions are of three general categories:

  1. Technical – Do you know the technical basics of accounting and valuation?
  2. Fit – Are you a good fit for the firm’s culture?

You’re also sure to face questions to see what you actually know about the firm with which you’re interviewing, so know its history and current activities is a must. Read more job interviewing tips.

Common Interview Questions

While questions will certainly vary by firm, you can expect to hear questions similar in nature to these:

Who else are you interviewing with and why? Are they outside investment banking?

Tell me about the role and responsibilities of an analyst.

Describe the current market environment.

Tell me about your most challenging professional experience.

What are your greatest strengths? Weaknesses?

Where do you see yourself in X years?

What are the most important qualities for a career in investment banking?

Describe a current event in the market.

What is your most challenging professional experience? How did you handle it?

What attributes do you believe make for a good leader?

Describe an ethical decision you had to make?

Why would two companies merge?

Explains some of the reasons two companies would merge.

Walk me through a cash flow statement.

Explain working capital and how you calculate it.

What factors drive Mergers and Acquisitions?

What are some common anti-takeover tactics?

Why might a company choose to issue debt vs. equity?

What were today’s headlines in The Wall Street Journal?

What could a company do with excess cash on the balance sheet?

How would you calculate a firm’s WACC? What would you use it for?

How do you calculate the firm value for ________________.

What factors affect corporate bond yields?

You know a company’s net income. How do determine cash flows?

Explain the difference between an income statement and balance sheet.

What was our firm’s share price yesterday?

What has happened in the markets in the past three months?

What would you personally invest in?

What department do you want to work for and why?