Special Focus: Investment Banking & Mergers & Acquisitions and Corporate Finance
- Do you want to sell or trade equity or debt instruments? Why?
- Give me an example of a time where you have been creative to get out of a tricky situation.
- What would you invest in with $10 million?
- Where is the ____ (DJIA, USD/EURO, Gold, Oil, S&P 500, NASDAQ, Federal funds rate, LIBOR, 10 yr. treasury yield, etc.) at?
- What is a PE ratio? What does a relatively high PE ratio mean to the market, and how does that differ to what it means for a trader?
- If interest rates rise, what happens to bond prices, and why?
- Given a fair coin, what is the expected number of tosses you need to get 2 consecutive heads?
- What is the limit of ((a^x + b^x)/2)^(1/x) as x goes to 0?
- Imagine a cube, made of 1000 of small cubes, so it’s 10 by 10 by 10. How many of these cubes are facing the outside?
- I have a 3-gallon drum and a 5-gallon drum, and I want 4 gallons of water. How do I do that with only the 3 and 5-gallon drums?
- How many people does the McDonalds in Times Square serve every year?
- There are 3 hats, one of which has an apple under it, and you are directed to select which hat has the apple. Once you make your selection, I remove one of the hats and ask if you want to stick with your first choice or select another choice. What do you do and why?
Adopted from Columbia Financial Investment Group
This type of interview is usually common when you apply for Investment Banking positions. If you do well and go through the first round of screening, you move to the next round – “superday interviews,” which are held at the bank’s offices. At the minimum, you can expect to speak with at least 1 banker at every level – Analyst, Associate, VP, and MD – in your final round interviews.
This means that a “Superday” interview can last all day, from 8.00 am to 6.00 pm, with 10+ interviews. Each interview usually lasts for 30 minutes, with the first few minutes devoted to telling your story.
For more information about Investment Banking Interviews, please read this article How to Dominate Your Investment Banking Interviews and Win Offers
Adapted from mergersandinquisitions.com
Finance/Investment Banking Interview Questions
- Why would two companies merge? What major factors drive mergers and acquisitions?
- What are some common anti-takeover tactics?
- What is an LBO? Why leverage up a firm?
- Why might a company choose to issue debt vs. equity?
- 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?
- What is the Beta and where would you go to find a firm’s Beta? How and why would you unlever a beta?
- What is the Capital Asset Pricing Model (CAPM)?
- What is EBITDA?
- Walk me through the major line items of an Income Statement.
- Do you follow an industry and/or a stock?
- Describe a typical day for an Investment Banking Associate.
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