IB-Interview

Top Investment Banking Interview Questions (with Answers)

In Investment Banking by Gaurav SharmaUpdated On:

Investment Banking interview questions broadly come in two flavors:

  • Behavioral, Personality and Fit Questions
  • Technical Questions that include modelling, logical reasoning, finance concepts, etc.

The behavioral questions are, in fact, common across all front-end finance roles so we will cover them all here. Technical questions are more role-specific and are covered in their individual categories (like Debt Capital Markets, M&A, LevFin and so on).

Behavioral Questions

What if I told you that these are the questions that really matter?

Your technical competencies and capabilities are easily evaluated through your grades and academic performance. An interview is all about:

  • Personality
  • Compatibility
  • Soft skills

You can’t assess these qualities with technical questions. Managing Directors or Partners don’t even ask technical questions for the most part. They ask behavioral and personality questions. The people who generally ask technical questions are mid-level managers or Associates.

You need to be able to ace both parts of the selection process of course, technical and behavioral. But while the former is a basic qualifier, it’s the latter that’s the real differentiator.

1. Tell me about yourself

As you can well imagine, this is not a technical question. They just want to know who you are. They are gauging your personality. Try to think of interesting things to say here, while at the same time making sure the answers don’t come across as canned. This is not about what’s on your CV, this question is a personality test – pure and simple.

Your answer should be a healthy mixture of:

  • “I am….” – Factual details about you
  • “I did….” – Achievements (academic, internships, work experience)
  • “I like…” – Hobbies, personality traits
  • “I led…” – Leadership
  • “I tried….” – Experiments and learning from failure

2. Walk me through your CV

This question serves two practical purposes. Firstly, the interviewer wants to see how well you can sell/ market yourself. In banking/ consulting, you are as much a product as the actual service deliverable. The client needs to believe in you and this question is one way to test your ability to be a good salesman. If you can’t sell yourself, what can you sell?

Secondly, it’s just practically convenient to have you, the author of your resume, quickly highlight the key points.

Do not make the mistake of giving templated answers here. Your answers have to be natural.

3. Questions about your academic background

You may be asked why you picked a particular discipline, or a particular college, a particular concentration and so on. Just answer truthfully here. This is not a trick question. In fact, it is a great opportunity to establish trust.

For example, I had an engineering degree in computer science and was interviewing for a banking role. Why? Here’s my answer: “I liked programming and coding in school. It has elements of logical reasoning, creative thinking and out-of-the-box problem solving which I found intriguing. But over time as I interacted with the real world, I grew curious about how businesses work, what makes the economy tick, how great companies are built. In finance, I saw an opportunity to combine logical reasoning and problem solving while also working with all the great companies and brands that I have come to know”.

This answer sounds a bit formal because I am typing it out which makes it sound a bit flowery. But that is not the important part – the important part is the idea that you are trying to convey.

Also notice how I am not really making any outright negative statements. For example, maybe I also don’t want to be a programmer because I don’t want to sit in front of a computer all day. But you need to keep the message positive.

4. Why Investment Banking? (or whatever specific role within IB)

I can give you a dozen good answers for this, but first you need to really figure out why you want it.

I guess for many it might be the money or the “prestige” or the exit options. You have to balance the need to be genuine, while also thinking about it form the recruiter’s perspective. Would they want a candidate that they spend 2 years training only for him/ her to jump ship?

So how do you answer this then?

Easy – think about the work you will be doing. Do you like building Excel models? Do you like making presentations? Do you like crunching numbers? Do you like working on hard problems? Do you like being part of a crack team that has a reputation for being the best? Are you willing to put in 70-80 hours a week just because it might give you a chance of being part of such a team? Do you think you can meet and exceed lofty targets set for you? Do you enjoy challenging business environments? Do you have what it takes to rub shoulders with industry veterans and CXOs of Fortune 500 companies?

Answer all such questions and the ones where you answered “yes” are part of the reason why you want to be in investment banking or any other finance role for that matter.

5. Hobbies, Interests and related questions

This can be thrown at you from multiple angles. Most of the time though, it’s a result of something that is spotted on your CV.

The mistake that most candidates make here is that they try to come up with something that sounds interesting, but they aren’t really into it. Interviewers can spot that form a mile.

The key is to present whatever boring hobbies you actually have, in an interesting way. It also does a lot to highlight your sales skills that we touched on before (If you can’t sell your hobbies, what can you sell?).

For example, I like video games and books. How drab.

So, I decided to instead mention my all-time favorite game – a Grand Strategy set in the early industrial age. And things suddenly got a lot more interesting. There’s lot to talk about now – history, economics, Adam Smith, railroads, manufacturing, globalization, military strategy, artillery tables, dreadnoughts, John Stuart Mill and so on.

Why am I telling you this? To make the point that you can make anything interesting and unique with an angle.  I could have just lied and instead said that I like playing the harp (after watching a few YouTube videos about it). But wasn’t my original answer more interesting?

You won’t believe the sort of crazy hobbies that I have heard over the years, and in many cases, it backfires because some candidates are just trying to bluff their way through.

6. Why our Bank? (and variations thereof)

In order to provide the best answer to each question, you have to understand the intent behind it. This question is asked so that the interview can gauge:

  1. How well you do your homework
  2. Are you likely to stick around long enough for them to invest in your training

The best way to answer this is to talk to any alumni, contacts or friends at that bank beforehand. Ask them what is really unique about that place. What products, regions or segments are they strong in? What is the culture like? How do they take care of their employees?

Then use all of these answers to create a mental picture of what’s it going to be like working there. If you don’t have any contacts, then do some primary research on the internet. Reddit is a great place and there are subs with tens of thousands of active users that focus solely on financial careers.

No one wants to hear boring, stereotypical answers. Neither are they fishing for compliments when they ask this question. Give them an answer that they think, “Oh, yea. That’s why I am here too!”.

7. Do you have any other offers/ interviews?

Ooh, this is a tricky one. If you say no, you don’t come across as particularly desirable. If you say yes, then they might press you for more information, ask you which one you prefer or just become less sure about you accepting any eventual offers.

Whatever you do – don’t lie. It will come out sooner or later and you don’t want to start your career that way. HRs have crazy-good networks anyway.

Here’s how to answer this:

If you don’t have any other offers – You have to sugarcoat it just a tiny bit. Maybe it’s because you applied selectively, had location constraints, wanted to focus on XYZ which this bank is strong at, thought this would be a better fit for you and so on.

If you do have another offer or interviews – Simply tell them that you do, without specifying where. Any reasonable person won’t hold it against you.

8. What’s your opinion about your previous employer?

Remember to never bad-mouth or talk ill about any company that you have worked for or interned with. Even if you were flipping burgers somewhere, it is an experience that you definitely learned something from.

Start by listing out all the good stuff. Maybe you liked the social interactions, maybe your boss was a good mentor, maybe you learned some hard lessons, maybe your peers pushed you to reach ever greater heights. Just don’t mention how good the hours were or how chill your work was because Banks are looking for candidates who work both smart and hard.

9. Why did you leave your previous job then?

This is a follow up question to the previous one or sometimes asked separately. Either way, start by listing out the good things about your previous job and mention just one or two reasons why you thought it was time to move on.

Steer clear of making any broad statements. For example, don’t say you learned everything there was to learn about the job. Because you can be sure the interviewers can come up with a lot of questions about your previous job that you may not know the answers too.

Focus on reasons that revolve around career growth, progression, taking things to the next level, more challenges, more opportunities, working with bigger companies, the excitement of deal making or closing big transactions, being in the company of people who run the world economy (talking about the clients here).

10. Why do you think you are a good fit for this role?

This question has a dual purpose. First of all, they want to make sure you know what the role is all about. And secondly, they want you to convince them of your ability to perform that role.

So obviously you prepare for this by finding out everything there is to know about the role. There are plenty of guides about specific roles on this site and many others. Go through them, then reach out to any contacts on LinkedIn or elsewhere to know what it takes to be successful in that role.

Fill any gaps in the technical knowledge that you may have. For example, for ECM/ DCM roles, you do need to know at least the basics of how the capital markets work. Then, make an elevator pitch combining all your qualities. This is covered in the next answer.

11. Why should we hire you?

This is your elevator pitch. Make sure you have one before going in.

Unlike what you see in the movies, this is not about making some silly grandiose gesture or statement. Most of the candidates come up with similar answers. It’s about delivery.

They should hire you because you have conclusively demonstrated that you have the skills necessary to succeed. You know the technical stuff, your grades are good, you can handle the pressure, you are a team player, you can be trusted to get the job done, you are willing to learn, willing to work hard, willing to go the extra mile, willing to take the initiative, willing to learn from mistakes, willing to be helpful to others and perhaps most importantly – you are a fun person to be around!

12. Where do you see yourself in five years?

Not all questions are necessarily about you! I have asked this question to candidates and its more about knowing if our investment in you is going to be worth it.

Some roles are obviously just steppingstones, and no one is going to expect you to stay there forever. Most analyst and entry level roles fall into this category. But when hiring for more senior roles, some loyalty is expected. Answer this question based on this consideration.

If you are genuinely interested in sticking with the team you are interviewing for, give them the honest answer. Tell them why you like the team and the work. Otherwise, you might have to sugar coat it a bit.

Guesstimate Questions

These questions are all about figuring out your thought process.

These are questions that no one really knows the answers to, but they want to see how you approach the problem. How many grains of sand on a beach, how many birds in the city, how many bricks in this building etc.

You need to make a lot of assumptions in finance because the value of a company or its credit worthiness etc. is based on future projections. And you have to make predictions and work with a lot of uncertainty. This is why these guesstimate questions are so popular.

You can’t possibly prepare for every such question beforehand, but this is the broad approach to solving them:

  • Firstly, figure out the size of the container universe. For example, how big is the beach in square meters? What’s the size of the city? How big is the building (surface area)?
  • Next, figure out the size of the object. How big is a grain of sand? How many birds can live per square kilometer? How big is a brick? You don’t have to be exact here. Remember, its about the thought process.
  • Then it’s a simple matter of fitting the objects into the container universe.

This is the kind of thought process they are interested it. You need to figure out what variables to look at and how these variables interact and affect each other. Speak out loud as you think through the problem.

Problem Solving/ Brainteasers

These are questions that test your fundamental problem-solving skills, without probing your knowledge about finance. What this means is that a smart student who never took a finance class, should still be able to solve these.

They fall into many categories like:

  • Probability theory
  • Data sufficiency/ adequacy
  • Relationship between variables
  • Event sequencing and so on

If you want to practice these, just grab a good brainteaser book from your library or off of Amazon and have at it.

Ethics questions

Have you read the Superman comics? Maybe it’s time to start because that is how you need to think here. Answer each question like Superman would.

Here’s the hierarchy in terms of whose interests come first:

  • Government regulations above all followed by internal guidelines. These are inviolable.
  • Then come the clients
  • The firm comes third
  • Your team is fourth
  • And here you are at the bottom. All alone (with Superman).

I also suggest reading through the CFA Ethics curriculum even if you are not planning on taking the exam. It’s notoriously tricky and one of the few sections that I could never score perfectly on.

Psychometric Tests

These are fun little tests that combine logical reasoning, quantities ability, ethics etc. into one coherent personality test. Follow the advice above for each category and you should be fine. The important point here is to keep track of the time that you are spending on each question. Quickly move on to the next one rather than wasting time on one that you are stuck with.

IB Interview Resources

Here’s a small, curated list of resources to help you prepare for your upcoming interview:

Resource TypeResource ProviderLearn More
Best Certification (Online)Investment Banking Certification from the New York Institute of FinanceCheck Course Details
Interview Prep Guides + Resume ReviewWSOLearn More
CV/ Cover Letter/ LinkedIn Profile Writing ServiceResume PlanetLearn More

Books:

Best Book for IB Interviews (Behavioural)
  • McGowan, Adam (Author)
  • English (Publication Language)
  • 134 Pages - 08/08/2016 (Publication Date) - CreateSpace Independent Publishing Platform (Publisher)
Sale
Best Book for IB Interviews (Basic Concepts)
  • Pignataro, Paul (Author)
  • English (Publication Language)
  • 288 Pages - 02/28/2017 (Publication Date) - Wiley (Publisher)
Sale
Best Book for IB Interviews (Advanced Concepts)
  • Hardcover Book
  • Rosenbaum, Joshua (Author)
  • English (Publication Language)
Sale
Best Book for IB Interviews (Quantitative)
  • Crack, Timothy Falcon (Author)
  • English (Publication Language)
  • 354 Pages - 09/27/2018 (Publication Date) - Timothy Crack (Publisher)

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About the Author

Gaurav Sharma

Gaurav started his career as a Corporate and Investment Banking intern at Citi in 2009 and eventually ended up as an Associate Director at Standard Chartered Bank’s Wholesale Banking division a few years later. By 2016, Gaurav was consulting FinTech start-ups in London with product development in the institutional banking space. He also advises mid-market Private Equity/ Asset Management firms and Banks in North America and Europe with investments in the financial services and FinTech sector. Gaurav writes on topics ranging from European Union banking regulations and FinTech to Blockchain startups and the inevitable rise of our AI overlords! He has an Engineering degree in Computer Science and an MBA with a double major in Finance and Marketing. He is also a Certified Financial Risk Manager.