Investment Banking Interview Questions

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Define Why You Want To Do Investment Banking

  • Opportunity to work and learn from the smartest people
  • Ability to execute a large amount of transactions and learn the deal process inside and out
  • Passion for finance; IB provides exposure to sophisticated deals as well as financial modeling
  • Fast-paced environment
  • Collegial team environment

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Handling The Interview

Staying calm and focused on answering the questions clearly.

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Interviewing With Multiple Banks

Being honest and letting your potential employer know that you are invested in searching.

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Strengths & Weaknesses

Understand your strengths and weaknesses so your employer can ensure perfect fit.

Where do you see yourself in 5, 10 and 15 years?

This question may be good to show bits of your personality and how you plan to use banking to pivot in maybe 15 years to another career of your passion.

Why do you want to work at a boutique or bulge bracket or Canadian or American bank?

Both boutique and bulge brackets are tremendous firms to work for, but it is key that you have set stories for both types of banks.

What makes a good modeler?

A good modeler is someone who is curious and tenacious. A great model is a tedious process that involves research and looking at numerous forms of guidance to come up with reasonable numbers and assumptions.

Have You Ever Managed A Team Before?

  • Describe the context of the team’s goals and how you arrived into a leadership position. Elaborate on the challenges you faced and how you overcame them. Make sure to communicate clearly and provide tangible details on both the challenges and the steps you took to overcome them.
  • Finally, speak about how your efforts led to a positive result; if you can quantify this result, that’s even better, although it’s not necessary. Conclude with what you learned and gained from the experience.

Why Not Private Equity?

  • Although some candidates may be interested in private equity, it’s important to speak to your interest in investment banking. The focus should be talking about all the advantages of investment banking, rather than talking about the disadvantages of private equity.
  • For example, maybe you enjoy the client presentation aspect of investment banking, which requires you to understand what the client wants and how the deliverable should be framed to maximize value.

8 Articles You Need To Ace Your Next Financial Interview

If a company has negative enterprise value, what does that mean?

This means that the company must have more cash than the equity value, debt, and preferred equity combined together. Cash is subtracted from the enterprise value, so the larger cash is, the lower the enterprise value. The company also likely has a suppressed equity value due to negative investor sentiment. Investors are expecting the company […]

What is adjusted funds from operations (AFFO)?

Adjusted Funds From Operations (AFFO) is calculated as: AFFO = FFO + rent increases – capital expenditures – routine maintenance amounts For reference, the formula for Funds from Operations (FFO) is:FFO = net income + depreciation & amortization + property sales losses – property sales gains – interest income Compared to FFO, AFFO provides a […]

What is funds from operations (FFO)?

Funds From Operations (FFO) is calculated as: FFO = net income + depreciation & amortization + property sales losses – property sales gains – interest income FFO measures the cash flows generated from a real estate company’s core operations. Unlike net operating income, FFO is levered metric which is after the effects of debt, which […]

What is net operating income (NOI)?

Net operating income (NOI) measures the core profitability of real estate properties. It’s calculated as: NOI = revenue generated from property – operating expenses NOI is before any cost of financing (such as debt or mortgage interest expense) as well as income taxes. It focuses only on the core revenues and expenses directly related to […]

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