Interview Success Tips

15 Most Common Investment Banking & Finance Interview Questions

Some of the most common banking interview questions for an investment banking interview include (some are a bit on the tough side but they DO come up very often, increasingly as a means of trimming down the candidate lists as the finance graduate job market gets harsher):

How many degrees (if any) are there in the angle between the hour and the minute hands of a clock when the time is a quarter past three?
[Typically asked during investment banking interviews for entry level investment banking graduate jobs]

Find the smallest positive integer that leaves a remainder of 1 when divided by 2, a remainder of 2 when divided by 3, a remainder of 3 when divided by 4, … and a remainder of 9 when divided by 10
[Typically asked during investment banking interviews for quantitative investment banking finance jobs]

Two standard options have exactly the same features, expect that one has long maturity, and the other has short maturity. Which one has the higher gamma?
[Typically asked during investment banking interviews for bank derivatives trading jobs]

How do you calculate an option’s delta?
[Typically asked during investment banking interviews for derivatives trading jobs]

When can hedging an options position make you take on more risk?
[Typically asked during investment banking interviews for trading jobs]

Are you better off using implied standard deviation or historical standard deviation to forecast volatility? Why?
[Typically asked during investment banking interviews for quantitative finance jobs]

Describe “duration” and “convexity”. Describe their properties and uses
[Typically asked during investment banking interviews for graduate investment banking jobs]

Two players A and B play a marble game. Each player has both a red and a blue marble. They present one marble to each other. If both present red, A wins $3. If both present blue, A wins $1. If the colours do not match, B wins $2.
Is it better to be A or B, or does it matter?
[Typically asked during investment banking interviews for quantitative finance or derivatives jobs]

How do you “value” yourself? Here “value” means in financial terms
[Typically asked during investment banking interviews for MBA finance jobs or experienced banking hires]

What distinguishes you from other candidates we might hire?
[Typically asked during investment banking interviews for graduate investment banking vacancies]

If you could go on a cross-country car trip with any three people, who would you choose? Why?
[Typically asked during investment banking interviews for corporate finance / mergers & acquisitions banking jobs]

Tell be about a stock you like or hate and why
[Asked by investment banking job interviewers for any accounting, finance or investment banking job!]

What is the difference between default and prepayment risk?
[Typically asked during investment banking interviews for credit jobs / risk management jobs]

How would you move mount Fuji?
[Typically asked during investment banking interviews for consulting jobs or graduate accounting jobs]

Estimate the annual car demand for car batteries
[Typically asked during investment banking interviews for corporate finance jobs, mergers & acquisition banking jobs or consulting jobs]

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Product Description
Why do you want this job? Why should I hire you? Why do you want to leave your current job?

Do you have convincing answers ready for these important questions? Landing a good job is a competitive process and often the final decision is based on your performance at the interview. By following the advice of prominent career planning and human resource expert Peter Veruki, you’ll know you have the right answers at your job interview.

The 250 Job Interview Questions You’ll Most Likely Be Asked

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sample of a good and bad interview from jobstreet.com – question: WHAT IS YOUR MOST SIGNIFICANT ACHIEVEMENT?

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So last month I tackled some of the common job interview questions you are likely to field. Some of them may have seemed tricky, but they’re small fry compared to some of these tough interview questions that employers reserve for when they really want to make the applicants sweat!

But fret not, dear readers – there are answers to (or at least efficient ways of dodging) the most fiendish of job interview questions. How? Read on…

”Some of this job will be repetitive and mundane. Are you seriously okay with that?”

Ouch – how’s that for an opening tough interview question? Of course no one is over the moon about repetitiveness and they know this, which is why if you’re overly positive you’ll smack of insincerity – they’re not just looking for an intelligent, positive response here, but one that’s believable! To that end, in answering this interview question you might find a good response to be something like: “Of course all jobs have elements that are repetitive and less interesting than the others, but I’ve always tried to give 100% in every aspect of my work – mundane or not.”

”How have you managed to attend this job interview during office hours?”

This tough interview question may as well have been rephrased “does your boss know you’re here?” because that’s what they’re asking! It should be fairly obvious that the right answer isn’t “I pulled a sicky!” A good answer to this is “I took some of my pre-allocated holiday time to attend”, or if you want extra brownie points it will look exceptional to say “Regrettably, I was out of paid holiday time, so I asked my employer for some unpaid leave. I don’t think it would be fair on them to pay me for time spent attending other job interviews.”

”You know what the job involves – which part do you think sounds the least appealing?”

This interview question is incredibly mean and unfortunately there is no easy way out. You could try and keep it short with a “Having read through the job description, there isn’t anything which really doesn’t appeal to me” but if the job does have unappealing elements (and 99% of jobs do!) then you’ll come across as insincere. If there are aspects of the job which you can see yourself hating then be honest about it – just make sure it isn’t a major part of the job, and try to play it down when answering the interview question with a “but every job has some areas which don’t appeal, so I would still endeavour to take on these less appealing elements in a mature and professional manner.”

”What kind of person do you find it hard to work alongside?”

Although this interview question seems like an easy pitfall, there is real potential to turn a negative into a positive! Start off your answer with your best trait, as in “I’ve always thought of myself as very hardworking/sincere/quick/efficient, and so I sometimes find it frustrating to work alongside those who lack that particular quality. That said, I do pride myself on being very easy to get along with and a team player, and I have never met someone I can’t work alongside.” When answering the interview question this way, you highlight your positive points rather than other people’s negatives.

”To be honest, you seem to be overqualified for this position…”

Not an interview question as such, but something that definitely needs to be effectively deflected: if they feel you’re overqualified it seems to imply you’re either desperate for work (which you may well be, but you don’t want them to know) or likely to move on within a few months. If this comes up, you need to convince them that it’s just the kind of job you’d really enjoy – it’s hard to do, but when answering interview questions, convince them you have a high tolerance for boredom or that this kind of work is the type of thing you love doing and they should be thrilled to hire somebody so able.

”You haven’t been in your current job very long – why?”

The job interview process is expensive both in terms of costs and time – the employers don’t want to be in a position where they hire you and find you’re looking to move on within 3 months. They need their investment to be rewarded, and as such you need to set their minds at ease and convince them that it is your intention to be in ‘for the long haul’. A reasonable answer to this would therefore be something along the lines of “I felt I had learned all I could with my current employers and need to move on to enhance my career. I am now ready to settle down and devote myself fully to something I can commit to in the long-term.”

”You’ve been in your current job for a very long time – why?”

The flipside of the long-term human resources investment coin is that employers are often unimpressed by someone who seems to lack the ambition or ability to get another job. It’s a bit unfair, and should be easy enough to defend with one of the many legitimate explanations of employee dedication – a love of the job, good friendships, or a good old fashioned sense of loyalty.

”Have you been attending other job interviews?”

This job interview question is tough and can have both negative and positive repercussions. It could be an assessment of how much you want the job (“I’m only applying to this one simply because it seems ideal for my ambitions and skill set”) or a cheeky way of assessing if their rivals are interested in you (“I’ve been talking to a few other companies and considering my options.”) You have to use your own judgment to work out their intentions based on the tone of the interviewers and the other interview questions they ask. If you are in any doubt you could try hedging your bets and combining both the previous answers: “I have been talking to some other companies, but in all honesty this job is my preference, as the job description seems to match my experience and skillset.”

”What is your current salary?”

This is a cheeky job interview question that you should avoid giving the straight-answer to! They’re trying to save money as much as possible, and by working out your current wage they hope to be able to offer you the bare minimum (a slight increase on your current salary) – if you don’t tell them, then you’re in a far better position to negotiate. “It isn’t about the salary for me really – it’s the whole job package that interests me.” Avoid directly answering the interview question here, and you should be fine.

These tough interview questions are difficult to answer sufficiently, but the employer knows this – remember every applicant will receive the same grilling, and if you have the preparatory edge to put you ahead of your rivals, you have every change of pipping them to the post.

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