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 3 are 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?
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.
Answers to the Above and More Sample questions
Additional Sources and Tips