The 400 Investment Banking
Interview Questions & Answers
You Need to Know
Copyright 2009 Capital Capable Media LLC.All Rights Reserved.
Notice of Rights
No part of this book may be reproduced or transmitted in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher.
2
,Table of Contents
Introduction........................................................................................................................ 4
Fit / Qualitative Questions ............................................................................................... 6
Analytical / Attention to Detail Questions & Suggested Answers ......................... 7
Background / Personal Questions & Suggested Answers...................................... 10
‚Career Changer‛ Questions & Suggested Answers .............................................. 14
Commitment Questions & Suggested Answers ...................................................... 17
Culture Questions & Suggested Answers ................................................................ 20
‚Future‛ Questions & Suggested Answers.............................................................. 23
Strengths / Weaknesses Questions & Suggested Answers .................................... 25
Team / Leadership Questions & Suggested Answers............................................. 29
Understanding Banking & Suggested Answers ...................................................... 33
‚Warren Buffett‛ Questions & Suggested Answers ............................................... 39
‚Why Banking?‛ Questions & Suggested Answers................................................ 45
‚Failure‛ Questions & Suggested Answers ............................................................. 48
‚Outside the Box‛ Questions & Suggested Answers ............................................. 52
Discussing Transaction Experience ............................................................................... 55
Restructuring / Distressed M&A Questions & Answers ............................................ 62
Technical Questions & Answers.................................................................................... 75
Accounting Questions & Answers – Basic ............................................................... 76
Accounting Questions & Answers – Advanced ...................................................... 89
Enterprise / Equity Value Questions & Answers – Basic ....................................... 95
Enterprise / Equity Value Questions & Answers – Advanced ............................ 100
Valuation Questions & Answers – Basic ................................................................ 102
Valuation Questions & Answers – Advanced ....................................................... 113
Discounted Cash Flow Questions & Answers – Basic .......................................... 119
Discounted Cash Flow Questions & Answers – Advanced ................................. 128
Merger Model Questions & Answers – Basic ........................................................ 131
Merger Model Questions & Answers – Advanced ............................................... 139
LBO Model Questions & Answers – Basic ............................................................. 148
LBO Model Questions & Answers – Advanced .................................................... 155
Brain Teaser Questions & Answers......................................................................... 162
Introduction
This guide has one purpose: to help you answer the most important ‚fit‛ and technical
,questions in investment banking interviews. We tell you what’s important and what you
need to say – nothing more and nothing less.
Most other guides suffer from several problems:
1. The information is not investment banking-specific. Do you think you’re going
to get a question about ‚Why you’re interested in this position?‛ I’ll tell you
why you’re interested – because you want to make a lot of money!
2. The information is out-of-date, wrong or incomplete (see: The Vault Guide).
These days, interviewers assume you know the basics – like how to value a
company – and go beyond that with advanced questions that require thinking
more than memorization.
3. No answers are provided, or there’s minimal direction (see: The Recruiting Guide
to Investment Banking). Of course, you shouldn’t memorize answers word-for-
word, but it’s helpful to have an idea of how you might structure your answers.
4. The questions do not apply to interviewees from diverse backgrounds. If you
worked at Goldman Sachs this past summer it’s not hard to convince them
you’re serious about finance – but what if you didn’t? What if you’re making a
career transition or you’re coming in as a more experienced hire? That’s what
this guide is for.
5. The guides were not written by bankers. If you doubt my credentials, just refer
to Mergers & Inquisitions, where I’ve written over 200 detailed articles on
networking, resumes, interviews, and recruiting for investment banking and
private equity. The proof is in the pudding.
Your time is limited – so we get you the answers you need, when you need them (right
now).
What follows is a list of 400 investment banking interview questions and answers,
divided into different types of ‚fit‛ questions (personal, team / leadership, ‚why
banking,‛ etc.), technical questions (accounting, valuation, DCF, merger models and
LBO models, and brain teasers), and other topics (restructuring, distressed M&A, and
discussing transactions).
, What’s New in the 2nd Edition?
A lot.
Dozens of more advanced technical questions in each section.
40 Restructuring / Distressed M&A questions – very important in today’s market.
How to discuss transactions and deal experience in interviews, with sample
‚good‛ responses for each question.
More fit questions and answers that address important scenarios (explaining bad
grades, gaps in your resume, etc.).
Plus, video tutorials on how to tell your ‚story,‛ sample deal discussions, and sample
investment banking interview with full critiques – which you can access via the BIWS
membership site you have access to if you’ve signed up for this guide.
These new editions make the guide twice the length of the original version, but you
don’t have to read everything. Pick and choose which sections are most relevant to you.
I recommend reviewing the table of contents first and then skipping to the questions you
are most in need of understanding. Or you can read the entire guide all at once as well –
it’s up to you.
In either case, though, the key is to apply what you’re learning and test yourself. Rather
than reading everything passively, try to answer each question – and then check
whether or not you got it right. Do that, and you’ll be several steps closer to landing
investment banking offers.
-Brian
Mergers & Inquisitions
Breaking Into Wall Street
Interview Questions & Answers
You Need to Know
Copyright 2009 Capital Capable Media LLC.All Rights Reserved.
Notice of Rights
No part of this book may be reproduced or transmitted in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher.
2
,Table of Contents
Introduction........................................................................................................................ 4
Fit / Qualitative Questions ............................................................................................... 6
Analytical / Attention to Detail Questions & Suggested Answers ......................... 7
Background / Personal Questions & Suggested Answers...................................... 10
‚Career Changer‛ Questions & Suggested Answers .............................................. 14
Commitment Questions & Suggested Answers ...................................................... 17
Culture Questions & Suggested Answers ................................................................ 20
‚Future‛ Questions & Suggested Answers.............................................................. 23
Strengths / Weaknesses Questions & Suggested Answers .................................... 25
Team / Leadership Questions & Suggested Answers............................................. 29
Understanding Banking & Suggested Answers ...................................................... 33
‚Warren Buffett‛ Questions & Suggested Answers ............................................... 39
‚Why Banking?‛ Questions & Suggested Answers................................................ 45
‚Failure‛ Questions & Suggested Answers ............................................................. 48
‚Outside the Box‛ Questions & Suggested Answers ............................................. 52
Discussing Transaction Experience ............................................................................... 55
Restructuring / Distressed M&A Questions & Answers ............................................ 62
Technical Questions & Answers.................................................................................... 75
Accounting Questions & Answers – Basic ............................................................... 76
Accounting Questions & Answers – Advanced ...................................................... 89
Enterprise / Equity Value Questions & Answers – Basic ....................................... 95
Enterprise / Equity Value Questions & Answers – Advanced ............................ 100
Valuation Questions & Answers – Basic ................................................................ 102
Valuation Questions & Answers – Advanced ....................................................... 113
Discounted Cash Flow Questions & Answers – Basic .......................................... 119
Discounted Cash Flow Questions & Answers – Advanced ................................. 128
Merger Model Questions & Answers – Basic ........................................................ 131
Merger Model Questions & Answers – Advanced ............................................... 139
LBO Model Questions & Answers – Basic ............................................................. 148
LBO Model Questions & Answers – Advanced .................................................... 155
Brain Teaser Questions & Answers......................................................................... 162
Introduction
This guide has one purpose: to help you answer the most important ‚fit‛ and technical
,questions in investment banking interviews. We tell you what’s important and what you
need to say – nothing more and nothing less.
Most other guides suffer from several problems:
1. The information is not investment banking-specific. Do you think you’re going
to get a question about ‚Why you’re interested in this position?‛ I’ll tell you
why you’re interested – because you want to make a lot of money!
2. The information is out-of-date, wrong or incomplete (see: The Vault Guide).
These days, interviewers assume you know the basics – like how to value a
company – and go beyond that with advanced questions that require thinking
more than memorization.
3. No answers are provided, or there’s minimal direction (see: The Recruiting Guide
to Investment Banking). Of course, you shouldn’t memorize answers word-for-
word, but it’s helpful to have an idea of how you might structure your answers.
4. The questions do not apply to interviewees from diverse backgrounds. If you
worked at Goldman Sachs this past summer it’s not hard to convince them
you’re serious about finance – but what if you didn’t? What if you’re making a
career transition or you’re coming in as a more experienced hire? That’s what
this guide is for.
5. The guides were not written by bankers. If you doubt my credentials, just refer
to Mergers & Inquisitions, where I’ve written over 200 detailed articles on
networking, resumes, interviews, and recruiting for investment banking and
private equity. The proof is in the pudding.
Your time is limited – so we get you the answers you need, when you need them (right
now).
What follows is a list of 400 investment banking interview questions and answers,
divided into different types of ‚fit‛ questions (personal, team / leadership, ‚why
banking,‛ etc.), technical questions (accounting, valuation, DCF, merger models and
LBO models, and brain teasers), and other topics (restructuring, distressed M&A, and
discussing transactions).
, What’s New in the 2nd Edition?
A lot.
Dozens of more advanced technical questions in each section.
40 Restructuring / Distressed M&A questions – very important in today’s market.
How to discuss transactions and deal experience in interviews, with sample
‚good‛ responses for each question.
More fit questions and answers that address important scenarios (explaining bad
grades, gaps in your resume, etc.).
Plus, video tutorials on how to tell your ‚story,‛ sample deal discussions, and sample
investment banking interview with full critiques – which you can access via the BIWS
membership site you have access to if you’ve signed up for this guide.
These new editions make the guide twice the length of the original version, but you
don’t have to read everything. Pick and choose which sections are most relevant to you.
I recommend reviewing the table of contents first and then skipping to the questions you
are most in need of understanding. Or you can read the entire guide all at once as well –
it’s up to you.
In either case, though, the key is to apply what you’re learning and test yourself. Rather
than reading everything passively, try to answer each question – and then check
whether or not you got it right. Do that, and you’ll be several steps closer to landing
investment banking offers.
-Brian
Mergers & Inquisitions
Breaking Into Wall Street
