Investment Banking Interview Questions

With a good resume and an equally appealing cover letter, you will be able to convince the employer that you deserve a chance to be interviewed for the position of an investment banker. However, there is a gigantic difference between the impression that you create through the resume and cover letter and the actual impression of you that gets absorbed into the subconscious of the interviewer when the interview is being conducted. You need to work hard in order to ensure that the interviewer perceives you in a manner you want him to, not otherwise. This is possible if you prepare in advance and learn about all the investment banking interview questions, so that it becomes easy for you to answer the same while being interviewed.

Investment banking is different from conventional forms of banking. An investment bank does not accept deposits or lend loans to the customers like the normal banks. The operations of an investment bank are largely concentrated in providing services such as underwriting and trading stocks and commodities on behalf of the client. The job of an investment banker is to assist the clients and perform several tasks in order to help them raise the requisite capital. An investment banker is also involved in trading of derivatives, fixed income instruments, commodities, etc., and for assisting companies in mergers and acquisitions.

An investment banker should be ready for questions that are not just related to the core operations, but also those that define his/her personality and represent his/her characteristics. You, as an interviewee, should understand that no matter how experienced or qualified you are, things turn to a different level when you appear for the interview. You might not be able to recall and answer all questions unless you are mentally prepared. We have provided a few questions and answers below that will help you understand how the interviewer tests you on different parameters.

Question 1: Why did you choose to work in an investment bank over a conventional bank?
Answer: Explain the interviewer that you want to work in this industry owing to the opportunities and challenges it offers. Also, give an insight of what you think this sector holds in future according to the present trends.

Question 2: Why do you want to work with our organization?
Answer: Convince the interviewer by telling him/her about your inclination to work with the organization that is based not just on assumptions, but on facts that make the organization a perfect place to work. You need to research a lot and gather all the facts about the organization so that you can confidently express your desire to associate with it.

Question 3: Define the process of underwriting.
Answer: The process through which an investment bank raises capital by issuing securities is called underwriting. The funds raised through this process is technically different from loan, because the people or companies who provide funds are actually investing in the operations.

Question 4: What stocks do you prefer and why?
Answer: Do not pick a random stock. Tell about the stocks you prefer and give reasons that support your preferences. You need to follow those stocks on a regular basis because based on your answer, the interviewer may raise further questions.

Question 5: If given a chance, would you like to change your profession?
Answer: This is a question that the interviewer asks to know whether you are passionate for this profession or just doing it for earning your bread and butter. Tell the employer that you will stick to this profession even if given a chance to change the profession.

Question 6: How do you spend your spare time?
Answer: It is quite apparent that you might not get much spare time owing to the demanding work hours and schedules. However, you definitely have a hobby, and it would be better to explain your hobbies and interest areas. Whether it is playing football, cooking, or photography, each interest area reflects a versatile personality of yours.

Question 7: Whom do you consider you idol and why?
Answer: It is not necessary that you consider someone as your idol just for the fact that he/she has been a celebrated figure in investment banking or business sector. Anyone can be your idol, be it a politician, a social worker, a basketball player, or even a mythological figure.

Question 8: Why should we hire you?
Answer: You need to emphasize on your skills, knowledge, and experience in order to make the employer believe in you. Speak confidently and do not hesitate to give references of incidents where you proved your competency.

These questions investment banking interview questions are provided in order to help you prepare in advance for the interview and prove your mettle so that the interviewer is convinced and advances you to the further rounds. All the best!

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