Investment banking technical interview questions

“If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not split and reevaluate. “

-Sun Tzu

Ah, yes – the infamous investment banking interview.

But if you want to land investment banking offers, interviews are a rite of passage – so here’s how to dominate them.

The Process and What to Expect

In the US, the investment banking interview process goes like this:

1. Submit your resume online or through your contacts;
2. Go through a first-round, usually on-campus, interview;
3. If you do well, you move to the next round – “superday interviews, ” which are held at the bank’s offices (the article you’re reading right now covers this step);
4. If all the bankers like you, they give you an offer.

If you’re going for lateral positions or you’re breaking in after having already worked full-time in another field, the process will be more extended and you might go through dozens of interviews without an official “Superday.”

The Rest of the World

In Europe, Australia, and parts of Asia, there’s a big difference: you go to assessment centers rather than the usual Superday and complete case studies and presentations in front of bankers as your final round.

In the interviews prior to assessment day, the questions are the same as what you receive in the US, so the “fit” and technical questions in this article still apply to you.

The Superday Process – People and Time

At the minimum, you’ll speak with at least 1 banker at every level – Analyst, Associate, VP, and MD – in your final round interviews.

You can go higher than that and “Superday” can last all day, from 8 AM to 6 PM, with 10+ interviews.

Most of the time, though, no bank wants to devote entire days of senior banker time to interviews – so you should expect around half a day of interviews.

There’s no particular “best order” in which you should go through these interviews – it’s up to the bank, and you have no control over it.

Each interview lasts for 30 minutes, with the first few minutes devoted to telling your story (see below).

Questions

You can expect 3 types of interview questions:

1. Your Story – “Walk me through your resume/CV” or “Tell me about yourself.”
2. “Fit” Questions – “Are you a team player? Tell me about your weaknesses. How was your last internship?”
3. Technical Questions – “Walk me through a DCF. How does 40% cash vs. 50% cash affect a merger model? What happens on all 3 statements when COGS goes up by $10?”

Senior bankers are more likely to focus on “fit” questions, while junior bankers (analysts and associates) enjoy asking technical questions to test your mettle.

You may get brain teasers and “stress test”-type questions, but these were more common in ancient times (the 80’s, 90’s, and early 00’s).

Your Story

This is the most important question you will get in interviews.

Bankers often judge you 90% based on what you say in the first few minutes; the rest of the interview is just a formality.

So if you haven’t already done so, watch the “telling your story” tutorial, read about the key “story” mistakes to avoid and sign up for The Banker Blueprint to get sample stories.

Fit Questions

After your “story, ” fit questions are the second most important type – they are more important than technical questions for 2 reasons:

1. The senior bankers (VPs and MDs) who interview you will focus more on fit questions and they are the ones who decide on job offers.

1. Analytical – “Walk me through how you analyzed / calculated…”
2. Background – “Why did you pick that university / business school / major?”
3. Career Changer – “Why are you moving from engineering / accounting / law / marketing etc. into banking?”
4. Commitment – Are you going to bounce at the first job offer that comes your way?
5. Culture – Why us? Why this group rather than another group?
6. Future – What are your long-term career plans?
7. Strengths / Weaknesses – Name them, or tell me about the feedback you received in your last internship.
8. Team / Leadership – Talk about when you led a team, resolving conflicts, and so on.
9. Understanding Banking – Walk me through an IPO or M&A deal; What do bankers really do? What’s in a pitch book?
10. “Warren Buffet” – How would you invest $10 million? Tell me about the market. Pitch me a stock.
11. – Why would you want to move from another industry into banking and give up seniority? Where did your interest in finance begin?

How to Answer All of These

Many of these questions will flow directly from your “story” – for example, #3, #6, and #11 can all be re-purposed based on your resume walk-through.