General Fit Questions

Question 1

TMAY

Answer 1

1. TN - Math / Physics
2. Taught School
3. Foundation Bank

• Wealth Management
• Acquisition - Consumer to Corporate Growth Advising
• WWR - Experience in the Business Ownership Side

4. So I want to take my experience maintaining relationships & advising consumers on their finances and combine it with my interest & experience in business strategy to build and develop a long term career in investment banking.
5. MBA - GTown network - Name Drops

Question 2

Why Banking?

Answer 2

1. Growth opportunities - soft and hard skills
2. Personality Fit process and time management - this fits my personality and requires attention to detail, a strength that I beleive that I excel in.
3. My Interests Think like a CEO - fits my professional interest. I want to learn to better think like a CEO and being a part of a team that is constantly looking for key strategic businss opportunities and then helps to implement them is the perfect place to grow that mindset accros an industry group.

Question 3

4 strengths. Why should i hire you?

Answer 3

• Energetic Curiosity & Initiative: Physics, CFA, Westwood Roastery
• Leadership & Communication: Teaching High School, Constantly speaking with bank clients on the job
• Analytical & Detail Oriented: Physics Tests - Wealth Management Trading and Reporting
• Process Management : Starting a Business and wearing multiple hats at the bank

Question 4

Why this bank?

Answer 4

I’ve spoken with ___ and ____ and they both give me a strong sense of the team focus of the organization. Also, i’ve followed ___ in the news and I think it would be really interesting to work on deals like this.

1. People - Name Drop
2. Deals - name Drop
3. BS - I think your BS gives you an advantage… OR I like that your advice is independent and people can hire you based on only your advice.

Question 5

Success Story & Managing Up Story

Answer 5

Landon’s $100,000 portfolio / WWR S - I wanted to prove that I was capable T - I took the initiative and created an investment portfolio A - I presented it to the President R - Great performance for 2 years Very soon after being promoted to an Investment Associate, I found that my Advisor, Chad, was very protective of all the investment decisions. While he had promoted me to help him manage his book, I found he was having a hard time letting go of the decision making. I knew I needed to show him what I was capable of, so when a customer transferred a fresh $100,000, I immediately put together an investment recommendation and pitched it Chad. It was a little more aggressive than Chad’s typical fare, but I felt like at the client’s age, his accounts needed more growth opportunity and small cap exposure. The client really was happy about the extra growth potential and Chad allowed me to make recommendations to him for all new money going forward and meet with new clients he had not established relationships with. This allowed him to focus on client relationships and fulfilling his obligations as the Bank’s President. Two years later, this client’s accounts had been one of our top performers by far, more than outpacing the S&P. It was satisfying to call the client and update him on his performance.

Question 6

Team Project

Answer 6

Building the New website Situation –

Focus on the process of gathering data from each division and relaying that to the web developers. Also the organization of gathering photos.

Question 7

Tell me about a time that you failed.

Answer 7

Leading from a non-leadership role.

Failing to provide insistent, strong feedback on the needs of the team during Tricia’s transition In December 2016, we had some staffing shortages at the bank, which put a lot of extra time pressure on me to service customers. We lost our only employee who was fully dedicated to this. We had known she was leaving for some time and I had discussed the need for a replacement with my senior manager, but she was not replaced until 2 months later. At the same time, our branch location moved into a brand-new building in January 2017 which brought in an enormous amount of new walk in business and took my workload to an extreme level. In the end I did make it through this time successfully, but I count this in part as a failure because I didn’t communicate the need I saw directly enough to senior management. In hindsight, I was the employee with the best view of our hiring needs on the floor and I could see the problems developing, but b/c I was not a hiring manager, I only briefly mentioned my concern and did not press. A lot of frustration and poor customer experiences could have been avoided had I acted pre-emptively. I learned that it is important to trust your instincts and be honest in communication.

Question 8

Leadership Story

Answer 8

A week in charge: A.) One thing I greatly appreciated about working in a small office was the breadth of cross training and expected competencies. During my last year at the bank, both the President and the senior manager were out of the office for an entire week. It was fun to realize that while I was the youngest and least senior employee in terms of tenure, they both looked to me to keep things running smoothly in their absence b/c they knew they could trust me to be able to meet any customer need. On the first day I worked with new walk in clients on a potential home financing, closed a new auto loan, opened new checking accounts, and discussed annuity investments with potential clients, all while leading the other three deposit employees with any deposit questions that arose during the day. The rest of the week continued to remain busy, and I was proud to realize that I was fully capable of meeting our customer needs and keeping the branch operations running smoothly.

Question 9

What has been one of your most significant challenges

Answer 9

B.) “Most Difficult Challenge” Explaining an Annuity to a 12-person board. S – I traveled to a nearby branch to meet with a potential client about an annuity. When I arrived, the ‘client’ turned out to be an entire 12-person management board for this organization and they were holding an official meeting T – While I thought I was going to be answering specific questions about annuities to one person, I ended up being asked to make a presentation to the board. They wanted me to explain in detail the risks and why it would be worth it to them. A – I asked them first to tell me a little bit more about the organizations financial structure, made some notes and then gave them my recommendations. It was all recorded by the treasurer R – They ended up having extremely conservative and independent leadership, so in the end they decided they didn’t want to do anything that wasn’t FDIC insured and would try and wait a little longer for rates to increase.

Question 10

A time that you showed initiative

Answer 10

WWR / Docusign

Question 11

Tell me about a time when you had an ethical dilemma with a co-worker

Answer 11

I faced a number of interesting situations while working in the bank. I can think of one in particular in which one of our employees was very close to a woman who had a joint checking account with her husband. Her husband opened a second account and made it very clear he didn’t want his wife to know about it. I could tell that our employee was considering telling the wife, so I had to directly remind her that we were bound to confidentiality and warned her not that it would be a breach of our customer’s privacy to warn his wife, even if we thought what he was doing was unethical.

Question 12

3 Weaknesses

Answer 12

WEAKNESSES 1. PERFECTION IS SLOW. I can take a little extra time to make sure things are correct.” I’ve made some mistakes in the past and I am now very careful to make sure everything is correct, which can slow me down at times. 2. TOO DETAIL ORIENTED“My curiosity can take me deep into the details when I sometimes need to stay focused on the big picture.” 3. CAN BE AFRAID TO STEP ON TOES “Sometimes I don’t speak up even when I’m sure that someone else on the team or a superior has made a mistake or overlooked something.” – I find it difficult to confront someone who is my superior. -I’m trying to learn how to approach these situations with genuine curiosity instead of coming across as correcting my superior.

Question 13

Why did you not go to a better undergrad?

Answer 13

While it’s true that Union is not well known, it truly did provide me with an excellent education as you can see from my entrance into Georgetown on an excellent scholarship. I realized a little bit later than some the impact that a top tier school can have on my career and I’ve taken advantage of that through my MBA.

Question 14

2. You’ve never worked for a large firm

Answer 14

The school system I worked for has thousands of employees, so I understand what large organizations feel like. It’s true that this would be the largest company that I’ve worked for, but I view that as an excellent opportunity to learn from an organization that has incredible resources to help guide my growth as a banker.

Question 15

3. You’ve never worked in a major city. Can you handle NY?

Answer 15

I’m really excited to live here. I’ve travelled to London, Paris, and even spent 2 months in Istanbul and I love the pace of life in major cities. I’ve enjoyed making the transition from TN to DC and can’t wait to live in Manhattan. I have some really good friends in the city.

Question 16

4. Why are you trying to enter so late in your career

Answer 16

No one in my family is in finance, and almost no one from my school went into the Banking industry. If I had more exposure, I would have gone a more traditional route to enter as an analyst after undergrad. Even though my entry at this point is less traditional, I decided it was worth the risk to pursue the career I am deeply interested in. I think it fits my personality perfectly (Eager curiosity, analytical problem solving, and constant interaction with smart, challenging people).

Question 17

5. What were you doing between May 2013 and Feb 2014?

Answer 17

Yes, I began a Master’s in Spacecraft Engineering Physics at ERAU and was on a path to work for NASA or SpaceX, but While I got A’s during the first semester and enjoyed the advanced Physics I was learning, I was growing concerned that this career wouldn’t have enough of a social aspect to fit my personality. I realized I wanted a career that was dynamic and high energy, as well as complex and challenging. So, after 1 semester, I got took the job offer from Foundation Bank.

Question 18

6. IB is a huge commitment

Answer 18

How do we know that you won’t change your mind after you experience the brutality of it? I really see myself doing well in this industry. I’ve been in positions in the past where I haven’t felt pushed to my fullest potential and that is not somewhere that I want to be again. I’m here for the challenge and to succeed. I want to be pushed to my full potential. I don’t run from a challenge. I’m a distance runner and a tennis player. Both of these things have taught me perseverance, the importance of preparation and having the will to do your absolute best

Question 19

7. Can you handle the hours? –

Answer 19

During My Junior year of college, I worked 40 hours at two part time jobs, took 4 senior level Math / Physics classes and led a social club of 15 students in a diverse set of different social activities like games and service events. More recently, I woke up every weekday at 4 am to study for the CFA before work, went to the gym at 5 and then worked on building my coffee business most days for 2-3 hours in the evening and try to get to sleep by 10 or 11. I regularly put in 70-80 of work each week.

Question 20

9. Tell me about a time when you worked with a difficult team member.

Answer 20

Ryan Courtner - My Failure Story S - He was my age and admitted to being uncomfortable in leadership of me. T - He often a poor communicator that didn’t elicit feedback from me. It required me to play more of an active leadership role from a junior position A - I learned that I needed to be very direct for the sake of the company R - I had to bear the burden of poor leadership in a hectic, busy time. This question is a prime candidate for your “Failure” story, but your “Leadership” or “Success” story could also work well. The structure is the same: STAR, 100-150 words, and focus on your learnings, takeaways, and how you’ve been working to improve your teamwork and leadership skills.

Question 21

What’s your greatest strength?

Answer 21

Ability to get multiple things done at once. I worked in a 5-person office with the President of the bank. We were a full service bank and He loved to rely on me for important things at the last minute. I made all of our trade entries, and was responsible for preparing maturity schedules for the bank’s assets, and calculating rates of return for various client’s investments. On top of the reporting aspect, I was the lead Customer Service agent Bank wide for a number of bank products, and was in charge of the Cash Management for our deposit services as well.

Question 22

3. What’s your greatest weakness?

Answer 22

I sometimes take too much time to make decisions, or I second-guess myself, which makes it take longer to complete tasks.” Ex (I often prefer to triple check things rather than miss a mistake and can worry that I should have found another way to improve.) I am working on trusting others to double check me when that is an option.

Question 23

Why should we hire you?

Answer 23

Profit Strengths Experiences Firms hire people that can bring them results. I have a history of excellent results both academically and professionally. When I put my mind to something, it gets done. I have experience in both managing a team that demanded perfect precision and building strong client relationships. I’ve built a customer base for my own company and maintained strong customer loyalty and I have the technical training, intellectual curiosity, and problem solving skills to tackle any challenge that might come my way.

Question 24

How would your best friend describe you in three words?

Answer 24

Smart- I’m always challenging myself and pushing myself to accomplish hard things Outgoing- I enjoy being around people and really getting to know them. Reliable- I follow through on what I say and people know that I can do a good job.

Question 25

. What’s your biggest failure?

Answer 25

Use your Failure Story

Question 26

What feedback did you receive from your most recent internship or job?

Answer 26

Cite two strengths and one weakness.

Question 27

How would a former co-worker describe you?

Answer 27

Reliable Good with Clients You can mention 1-2 strengths and a single weakness for this one

Question 28

9. What peer feedback have you received in group exercises at your business school?

Answer 28

This is yet another combined Strengths and Weaknesses question, but the context is different: School rather than work. But the same strategy applies: Go back to one of your prepared “short stories,” picking one that relates to a student activity, and give 1-2 strengths and a single weakness.

Question 29

10. Why would we NOT give you a job offer today?

Answer 29

This one is also a combined Strengths and Weaknesses question, but you give your strengths first, and then admit at the end that you do have 1-2 weaknesses that could hurt your chances. Also, you can cite something closer to your “real” weaknesses in this response. Admit that other candidates might have more coursework or internships or something else, and then explain why you still don’t see that as a problem. It would sound a bit silly to say that you might not receive a job offer because of your time management skills or decision-making ability. Sample “Good” Answer: “I see no reason why you wouldn’t give me an offer because I can add value to your firm and help you earn more and save more. In past internships, such as my corporate banking one at Bank of America, my managers have said that I made their lives easier by handling analytical and modeling work, improving the screening and approval process for loans, and helping the team function more effectively by training new hires. If you did not give me an offer today, it might be because I don’t as much investment banking experience as other candidates.

Question 30

11. If you worked in a group with multiple you’s, what would happen?

Answer 30

This one is also a combined Strengths and Weaknesses question, and you can also give more of a “real” weakness. It may also be OK to use more of a “borderline weakness,” such as a lack of creativity, since this question asks you about a hypothetical situation.

Question 31

1. Which industries are you recruiting for?

Answer 31

At the MBA level or above, you must say, “only investment banking” or you will be dinged immediately.

Question 32

2. I don’t believe you. Everyone has a backup plan. What’s yours

Answer 32

Sample “Good” Answer: “I am focused on investment banking now because it’s my top choice, and it has the earliest application deadlines. I’m confident I’ll win an offer, but if I do not, I’ll consider related fields, like valuation or advisory work at Big 4 firms or corporate finance or corporate development at large companies

Question 33

3. OK, fair enough. Within banking, which other firms are you applying to?

Answer 33

You do want to name other banks that are about the same “level” (bulge bracket, elite boutique, middle market, regional boutique, etc.).

Question 34

4. Have you received offers from any other firms? Where are you in the interview process?

Answer 34

If you have received an offer elsewhere, you need to mention it because it will instantly double your desirability. If not, say that you’re still going through interviews with other firms and haven’t yet finished your final rounds. If you already went through final rounds at another bank, you may want to leave out that detail because you’ll lose some credibility if you say that you don’t know your status yet. Sample “Good” Answer: “I’m going through the initial interviews at Morgan Stanley and Bank of America, and I’m scheduled for final-round interviews at Nomura and Barclays next week.”

Question 35

5. So, you’re saying you haven’t won any offers yet.

Answer 35

At this point, the interviewer is playing “bad cop” and trying to annoy you. Instead of losing your cool and saying, “No, not yet,” flip it around and remind him/her that you haven’t finished interviews yet. Sample “Good” Answer: “Well, I haven’t finished interviews yet, and I’d need to complete final-round interviews to know my status.”

Question 36

6. Which groups within investment banking are you most interested in?

Answer 36

Sample MBA-Level “Good” Answer: “I worked in Cisco’s business development and corporate finance team before my MBA, so I would prefer to work in the Technology or TMT team, if possible, so I could use my knowledge of the industry. But I would be open to other groups as well if I’m fortunate enough to win an offer here.”

Question 37

7. I see that you’re also interviewing with the M&A team here today. Do you prefer us – Healthcare – or M&A?

Answer 37

You’d gladly accept an offer from either group. If you get an offer from both, you’d have to think about it more and get back to them. This one might not be a great answer under normal circumstances, but if you’re interviewing with multiple groups on the same day, you don’t want to rule one group out. Sample “Good” Answer: “I like both groups and I’d gladly accept an offer from either one. If I’m fortunate enough to receive offers from both, I’d have to think about it more and get back to you – it’s also hard to say since I haven’t completed all my interviews yet.”

Question 38

12. Do you have any questions for me?

Answer 38

Many interviewees are obsessed with this question, even though it barely makes a difference. You could ask about the interviewer’s background, what surprised him/her the most, the types of deals the bank is working on, or the qualities made previous interns successful. Do NOT ask about how much money they earn, what an average day is like, or how many hours they work; you can find all that online in a second. If you’ve already been through multiple interviews, you don’t “need” to ask yet another question at the end of your 10th interview. You could say, “Actually, this is my 10th interview of the day, and I think I’ve already gotten answers to all my questions,” and the other person will understand. Sample “Good” Answer: “Sure, can you tell me what the most surprising part of the job was when you first started working in this team?”

Question 39

2. What’s your single most impressive work experience?

Answer 39

WWR - 2 minutes on phone to 1/2 M dollar cient

Question 40

2. What’s your single most impressive work experience?

Answer 40

WWR

Question 41

3. What did you do at the bank? Tell me about it.

Answer 41

PWM - Management Roles - Deposits / App / Website Sample “Good” Answer: “Sure. In my wealth management internship at Merrill Lynch, I worked with 4-5 relationship managers and investment professionals to advise clients, respond to requests, and create new portfolios. My biggest contribution was reviewing one client’s holdings, realizing that they were tax-inefficient because of constant purchases and sales, and coming up with an alternate structure that mirrored the client’s strategy but with ETFs instead. The client saved over $10,000 each year as a result. I also used VBA to automate the portfolio review process, which saved the investment professionals several hours of time each week. Overall, I liked the internship, did well, and received good reviews, but also decided that I wanted to work in investment banking to advise larger clients and work on deals rather than monitoring portfolios.”

Question 42

see you’ve listed [the CFA / a financial modeling course / another training program] on your resume. Can you explain what you’ve been doing for that?

Answer 42

Sample “Good” Answer: “Sure. I’ve been spending about 5-10 hours per week studying for the Level I exam of the CFA, which is in December this year. I’ve been preparing by reading, completing Excel-based exercises, taking practice exams, and joining a study group that covers key topics each weekend. I know the CFA is not 100% relevant to investment banking because it tests broader topics and is theoretical rather than practical, but I’m coming in as a career changer with engineering experience, so I wanted to pass Level I to prove that I’m serious and that I have the required knowledge. Also, the topics on financial reporting and quantitative analysis are relevant to banking since you spend so much time on accounting and valuation.”

Question 43

Why Georgetown

Answer 43

The people were helpful and encouraging when I mentioned going into banking. They encouraged me that there would be a good path down this route and a strong network. My research bore out the same things. Practically, they offered me a lot of money, It was a city that both my wife and I really thought it would be fun to explore a new city before I started working in NY.

Question 44

1. You’ve never worked in finance before. How much do you know about what investment bankers do?

Answer 44

I know that investment bankers act as agents and help companies sell to other companies, raise debt and equity, and sometimes buy other companies – and they earn fees from closing deals. On a day-to-day basis, as a junior banker, you help support senior bankers by creating presentations, financial analyses, and marketing materials such as pitch books and Information Memoranda for clients. You also help with logistical details, such as scheduling meetings and calls. Your goal as a banker is to help clients achieve their goals – whether it’s selling the business or expanding by raising capital or acquiring other companies.”

Question 45

2. How much do you know about the lifestyle in this industry? Do you know how many hours you’re going to work each week?

Answer 45

Sample “Good” Answer: “I’ve done my homework and spoken with a lot of alumni in the industry, and I know that 80-100-hour workweeks are common for junior bankers, so that’s what I’m expecting. You work that much because clients’ demands are unpredictable, and deals can heat up at any moment, so you always have to be “on call.” And pitches often come up at the last minute, which means a high-volume of urgent work right before deadlines. I’m confident I can handle it because I’ve worked long hours over extended periods before – in university, I woke up at 5 AM each day during football season to train, took classes during the day, worked part-time after that, and then went to team practices at night, often finishing around 10 or 11 PM. And I did that for months at a time.”

Question 46

How do companies select the investment banks and bankers they work with?

Answer 46

Companies usually select banks based on relationships developed over the long term, but sometimes it’s more random and happens as a result of a pitch or “bake-off” right before the deal process begins (banks compete to win the business). The selection depends on the team’s comfort with each bank, the banks’ track records, and the banks’ key recommendations. Sample “Good” Answer: “Companies select banks based on a combination of factors, including the long-term relationships they’ve developed, the banks’ track records, and the pitches that banks make. Often, bankers start speaking with companies long before a deal ever takes place and advise them informally over the years, which leads to transactions in the future. If the bank is known for something specific, such as selling tech companies for high multiples, the company might factor that into its decision as well. Finally, each bank’s pitch in a ‘bake-off’ meeting also factors in: Companies pick the bankers they’re most comfortable with and the ones that give the best recommendations.”

Question 47

4. Let’s say that I’m working on an Initial Public Offering (IPO) for a client. Can you briefly describe what I would do?

Answer 47

“In an IPO, you aim to get the client a good valuation, recruit solid institutional investors, and support the client’s share price once it goes public. First, you meet the client and gather financial, industry, and customer information. Then, you meet with other bankers and the lawyers to draft the IPO registration statement, called the ‘S-1’ in the U.S., which markets the company to investors. You receive comments from the SEC and revise the document until it’s acceptable. Then, you spend a few weeks on a ‘roadshow’ where you pitch the company to institutional investors. You get a pricing indication at the end, you sell shares to the investors at that ‘IPO price,’ and then the company begins trading on a stock exchange. You try to maximize the client’s share price and cash proceeds, win solid investors, and ensure that the company’s stock price rises after it starts trading.”

Question 48

Walk me through the process of a typical sell-side M&A deal.

Answer 48

“In a sell-side M&A deal, the bank markets the company to potential buyers and helps negotiate a deal for the best price and terms possible. The bankers start by meeting the company, creating initial marketing materials like the Executive Summary and Offering Memorandum (OM), and deciding on potential buyers. Then, they send the Executive Summary to potential buyers to gauge interest, and they respond to follow-up requests for more information. Next, they narrow the list of potential buyers by setting a bid deadline and requiring written Indications of Interest (IOIs) from buyers. Bankers select certain bidders to advance, continue to send them information, and narrow the list.Eventually, they pick the winner, negotiate the Purchase Agreement, and announce the deal. Bankers try to maximize the price the client receives, but they also add value by negotiating the other terms and winning competing offers.”

Question 49

6. Walk me through the process of a typical buy-side M&A deal.

Answer 49

“In a buy-side M&A deal, the bank helps the client to select the best acquisition target, minimizes the price it pays, and gets it the best deal terms possible. First, the bankers spend time doing upfront research on dozens or hundreds of potential acquisition targets based on what the client wants to buy. Next, they narrow the list and decide which companies to approach; they conduct meetings with interested parties and gauge how receptive each one is. Then, they narrow this list further and conduct more in-depth due diligence on the most likely sellers. They use the companies’ financial information to come up with offer prices. Finally, the bankers negotiate the price and key terms of the Purchase Agreement and announce the transaction. Bankers add value in this process by minimizing the price, finding potential targets, and getting the best terms possible.”

Question 50

7. Walk me through a debt issuance deal.

Answer 50

“The process of raising debt is similar to the process of raising equity, but your goals are different because you want to get the lowest interest rates, covenants, and best other terms for the client. First, you meet with the client and gather basic financial and market information Next, you work closely with DCM or Leveraged Finance to develop a credit model for the company; you analyze the company’s credit stats and ratios in different cases, focusing on the more pessimistic ones, to assess the most appropriate terms. Then, you create an investor memo describing the issuance and “selling” the company to potential investors. If you’re not syndicating the debt, this memo would be for the bank’s internal credit committee to win approval for the deal. If you are syndicating the debt, you would contact potential investors and win commitments to purchase the entire issuance.”

Question 51

8. Can you describe what a Leveraged Buyout (LBO) is and how the process works?

Answer 51

“In an LBO, a private equity firm uses a combination of debt and equity to acquire a company, operate it for several years, and then sell it to realize a return. The process is similar to the one in an M&A deal: The bank advising the company still sells it and aims for the best price and deal terms possible. First, the bank meets with the company, creates marketing materials like the Confidential Information Memorandum (CIM) and Executive Summary, and makes a list of PE firms to approach. Then, the bankers send out the materials to gauge interest, respond to follow-up requests, and send more information. The bank narrows the list of potential buyers by setting a bid deadline and requiring Indications of Interest, and sometimes there are multiple rounds of bids. After the bank and company pick the winner, they negotiate the terms of the deal. The bank often offers debt financing from its Leveraged Finance team to support the deal.”

Question 52

What is a divestiture? How is it different from a normal M&A deal

Answer 52

Sample “Good” Answer: “In a divestiture, a company sells a division or business segment rather than the entire company. The process is similar to the one in a normal sell-side M&A deal if you’re advising the seller: You still gather information, create marketing materials, send information to potential buyers, narrow the list, and negotiate a purchase agreement with the winning bidders. The differences are that the process can be messier since it’s sometimes harder to sell a single division, the transaction structures can be more complex, and you have to evaluate the division as an independent entity and assess the extra employees and infrastructure that it needs.”

Question 53

10. What’s in a pitch book?

Answer 53

This question is tricky because different types of pitch books vary quite a bit. A pitch book for a sell-side M&A deal is very different from one for an IPO, debt issuance, or Restructuring deal. However, there are some common elements; you can focus on those and outline what a generic M&A pitch book would look like. If the interviewer wants to know how it differs for equity, debt, or other deals, let him/her ask about it. Sample “Good” Answer: “The point of a pitch book is to convince a company to hire your bank as an adviser on an M&A deal, equity or debt issuance, or another transaction. First, the bank presents its “credentials” – its recent track record and similar deals it has worked on – to prove its expertise. Second, the bank summarizes the company’s options and their key recommendations. Third, the bank presents a valuation of the company and related financial models; in equity or debt deals, the bank might show the company’s capital structure and credit stats and ratios before and after the deal. Next, the bank shows potential acquisition targets (for buy-side M&A deals) or potential buyers (for sell-side M&A deals) The bank concludes by summarizing everything, giving its top recommendations, and outlining the timing of the deal.”

Question 54

11. Imagine that you wanted to create a 1-page “company profile” slide in PowerPoint to pitch a company to a potential investor. What would you include on that slide?

Answer 54

Sample “Good” Answer: “In a profile, you focus on the key qualities that investors care about – the company’s overall business, its financial performance and valuation, its products and services, and its customers and geographies. You could put the name of the company in the header and then divide the slide into four equal parts. The top-left quadrant is for the business description, headquarters, and key executives. Put a stock price chart and the key historical and projected financial metrics and valuation multiples in the top right. The bottom left can have descriptions of the products and services, and the bottom right can show key customers and the geographies the company operates in.”

Question 55

Can you tell me about the different groups at an investment bank?

Answer 55

“There are industry groups and product groups at most investment banks. Industry groups only work within one industry, such as Healthcare, Retail, or Energy, but they work on all deal types within that industry; they focus on relationship development with clients and using their industry knowledge to advance deals. Product groups include ones such as M&A, Equity and Debt Capital Markets, and Leveraged Finance. Each group executes only one deal type, such as acquisitions or debt financings, but they do so across all industries. They become experts in the technical details behind deal execution

Question 56

How are Equity Capital Markets (ECM) and Debt Capital Markets (DCM) different from other product groups like M&A?

Answer 56

Sample “Good” Answer: “In ECM and DCM, you advise companies on equity or debt issuances rather than M&A deals, and you spend more time following the markets, spotting trends, and keeping other groups in the loop on market activity. Capital markets are groups like a cross between sales & trading and investment banking, and they’re good if you enjoy following the markets but also doing deals and working with clients. Your tasks vary based on the deal you’re working on; in a debt issuance, you might analyze a company’s financial profile and its credit stats and ratios in different cases to determine the appropriate terms. In an IPO, you would focus on telling the company’s story, valuing it, and completing the steps required to go public.”

Question 57

14. What’s the difference between DCM and Leveraged Finance?

Answer 57

Both groups advise on debt deals, but DCM focuses on investment-grade debt, which companies tend to use for “everyday purposes.” DCM is also closer to sales & trading and is sometimes closely related to fixed-income desks. Leveraged Finance focuses on non-investment-grade debt, which attracts different investors. Companies also tend to use this debt for transactions such as leveraged buyouts and M&A deals. In Leveraged Finance, you spend more time analyzing deals, while in DCM, you spend more time following the market and giving information to other groups that need it.”

Question 58

15. Let’s say you become an investment banker, and you’re hired as the financial advisor for a company to help it expand its business. How would you approach this task, and how would you add value as an advisor?

Answer 58

Sample “Good” Answer: “First, I would ask the company for its specific expansion goals – a certain revenue or profit target, a new geography, or a new product, for example. Then, I would assess the company’s financial and market profile and determine if it makes the most sense to acquire other companies, raise capital, set up partnerships, or pursue another strategy. For example, if the company’s leverage ratio is very high and it has almost no cash, acquisitions make less than partnerships or raising equity to fund organic expansion. As a banker, I would add value by introducing the management to potential partners and sellers, negotiating deals, and managing the process to get the best outcome.”

Question 59

16. A client approaches you and asks whether it should go public or sell to another company. How would you help the management team think through this decision?

Answer 59

Sample “Good” Answer: “I would present the trade-offs of both options to the client and explain that an M&A deal offers a ‘clean break’ and sometimes a faster process, but the client will give up most, or all, of its control and won’t participate much in future upside. Many deals also fail. In an IPO, the client sells only a minority stake, so shareholders and employees get some liquidity, but the company keeps operating as a standalone entity and retains control. But IPOs are time-consuming and don’t necessarily led to higher prices or faster growth. It comes down to whether or not the team wants to stay with the company for the long term – if it does, an IPO often makes more sense because the company can continue growing independently. If the team does not want to stay, then an M&A deal makes more sense.”

Question 60

17. Your Managing Director is meeting with a client, and you have been invited. As he’s presenting, you notice a mistake in the materials – do you point it out?

Answer 60

Sample “Good” Answer: “I would correct the mistake later on when I can do so discreetly, but I would not point it out in front of the client. Doing so would embarrass both the Managing Director and me, and there’s no reason to point out a mistake, especially if it’s small. If the client notices and asks about it, I would quickly address it, but otherwise, I wouldn’t say anything.”

Question 61

18. Tell me about a news story you found interesting lately.

Answer 61

You can tie this question to one of your deal or market discussions and use one of those as a “news story.”

Question 62

19. Tell me about the stock market.

Answer 62

Start by describing the overall market, including how major indices have changed (the Dow Jones and S&P 500 in the U.S. or the FTSE 100, CAC 40, and DAX in Europe). Then, summarize deal activity and broader economic trends. You don’t need to know the exact prices of oil and gold and the exchange rates for major currency pairs, but you should have an idea of how these figures have changed in the past year. For example, it’s good to know that oil is currently “around $60.00” and it has increased by 10% in the past year, but you don’t need to know that it’s exactly $60.87 right now.

Question 63

20. Can you pitch me a stock or tell me about a company you admire?

Answer 63

Avoid well-known companies (Google, Facebook, Apple, etc.). • Include key financial metrics and multiples and explain why the company is overvalued or undervalued vs. its peers. • Explain the time frame and potential upside in your recommendation. • Explain how you might mitigate the downside risk. • Aim for 60-90 seconds (150 – 225 words) – your answer can be a bit longer than usual, but it should still be shorter than your “story.”

Question 64

Let’s pretend that you own a small business, and a larger company approaches you about an acquisition. How would you evaluate the larger company’s offer, and how would you make a decision

Answer 64

To evaluate the offer, I’d consider the price, form of payment, the larger company’s plans, and the cultural and strategic fit. Obviously, a higher price is better, but past a certain range, I would pay more attention to the other terms. I would also prefer to get most of the payment in cash if I plan to leave the company. Stock might be better if I wanted to stay for the long term. I would be hesitant if they made me stay for years and years because market conditions can change very quickly. Finally, it’s important to fit in with the bigger company’s culture and strategy; if it seems like my employees wouldn’t be happy there, I would be hesitant to accept the offer.”

Question 65

A client comes to you and says that he/she has $10 million that he/she can invest in anything. What would you advise the client to do?

Answer 65

Always ask for the investor’s goals first. Are they looking to earn big capital gains over 30-40 years? Are they looking for tax-free retirement income? What assets interest them, and what is their risk tolerance?

Question 66

23. A friend wants to start a laundry machine business and has asked you to invest $500,000 in his new venture. How would you analyze this opportunity and make a decision?

Answer 66

would invest if the Present Value of future cash flows from this venture exceeds the upfront ‘asking price,’ which is $500K in this case. To estimate those cash flows, I would need to forecast the revenue and expenses. I don’t know the numbers here, but if we assume, for example, that there are 50 washers and dryers in this facility, and that each one is used 5 times per day, that’s 250 “turns” per day. If we say each wash or dry cycle is $2.00, that’s $500 per day in revenue. $500 per day in revenue means the annual revenue is 365 * $500 = $182,500. We’ll round that to $180,000. We might need one part-time employee to manage the machines, respond to customer questions, and coordinate maintenance; we can assume $50,000 for all of that. We don’t have a good sense for utilities and real estate taxes, but they might be around $3,000 per month depending on the square footage. So, the annual revenue is $180,000, annual expenses are $50,000 + $3,000 * 12 = $86,000, and the facility generates $94,000 in cash flow, before taxes, each year. Without even factoring in the Discount Rate, this seems like an exceptional deal because the business yields almost 20% in the first year. But we’d need better estimates to say for sure. And we’d have to discount all these cash flows to their Present Values, add up everything, and compare it to the $500K initial investment.”

Question 67

Why Coverage Groups? / Why Product Groups?

Answer 67

• Coverage:
  
  • Long Term Relationships
  • Industry Strategy / Not just financial strategy
  • Deep Industry Knowledge
  • Variety of types of transactions
• Product:
  
  • Get exposure to all industries
  • Get to interact with more people within the bank and build more relationships across the board
  • Get to be an expert at executing your specific transaction