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Beat the Street:
Investment Banking
Beat the Street: Investment Banking Interviews


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Beat the Street: Investment Banking Interviews

3rd Edition
ISBN: 978-1-58207-767-3

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All illustrations by mckibillo

Beat the Street: Investment Banking Interviews

1 at a glance 5 The Interview
17 The Interview

6 Present Conditions 18 Preparing Yourself

for the Beauty
7 Overview Contest

8 The Bottom Line 18 Research

Beat the
8 The Process 19 Rehearse

13 Alternatives to 20 Review

The Process
28 Investment
Banker Speak

Investment Banking

31 Interview Prep
5 6
55 Interview
81 A Students

32 The Judges 47 Your Turn to Ask 56 Sample Q&A 82 Note to the Reader
Scorecard the Questions
72 I-Banking vs 82 First and Foremost:
36 Acing the Interview 50 Denouement Management Things You Should
Consulting Know
38 Round One: 50 The Offer
First Interview 73 Never Let Down 84 Getting the
51 Salary Negotiations Your Guard Interview
41 The Airplane Test
74 Q&A Thought 85 Before the Interview
41 Round Two and Balloons
Beyond 86 At the Interview

44 Your Final Interview 88 After the Interview

46 A Few Words on the 89 Concluding Remarks

Stress Interview

At a Glance

At a glance
Beat the Street: Investment Banking Interviews

Beat the The First-Round Interview

Street at Treat it as a conversation.

a Glance
The Interview

Prepare examples from your past that highlight

your skills.

Investment Banking Breakdown Show enthusiasm for the company and the
Each of the following areas will typically have a industry.
different interview process (you must know which
you are applying for!): The Second-Round Interview and Beyond
The Interview

Corporate Finance (CorpFin) If you can, get tips from your first-round

Play it conservative at social events.
Be polite, courteous, and humble.
Final Interviews
The Three Rs to Prepare for Your Interview
Model your behavior on that of the people youve
Prep Guide

Researchknow the industry and the company met from the firm.
inside out.
Convey why you want to work at the firm, and
Rehearsepractice for the questions you know only that firm.
youll get.
Make everything in your past relate to I-banking.
Reviewmake sure that you know your finance
and accounting tools.
A Students

The Interview The Interview Interview Interview A Students
At a glance Process Unplugged Prep Guide Workbook Perspective

The Interview

Present Conditions............................6
The Bottom Line...............................8
The Process.......................................8
Alternatives to The Process..........13
At a glance
Beat the Street: Investment Banking Interviews

Present a helping hand from the federal governmentfor

just $10 a share. That was a fraction of its value just a

Conditions year earlier. Despite the bargain-basement purchase,

the mastermind of the deal, JPMorgan Chase CEO
The Interview

Jamie Dimon, issued a gloomy statement soon after.

In the late summer of 2007, recruiters in the Our expectation is for the economic environment

financial services industry awakened to a sea change: to continue to be weak and for the capital markets
the beginnings of a massive meltdown in the real-estate to remain under stress, Dimon said. These factors
lending sector. In the following months, their plans have affected, and are likely to continue to negatively
changed drastically as even some of the industrys impact our firms credit losses, overall business volumes
giants scaled back hiring. Connie Thanasoulis, and earningspossibly through the remainder of the
cofounder of the career-coaching firm SixFigureStart year, or longer.
The Interview

and a former recruiting executive for Citibank and As of May 1, 2008, Wall Street firms, including
Merrill Lynch, says former industry colleagues are such titans as Merrill Lynch, Lehman Brothers and

reporting that they will be cutting their summer Citibank, had laid off an estimated 39,000 workers at
internships for undergraduates and first-year MBA all levels. That doesnt include roughly 15,000 former
students by half. These programs are the primary Bear Stearns employees whose status was still in limbo
source of recruits for junior-level analyst and associate under their new JPMorgan bosses. Some outside
programs, the traditional entry points for young recruiting firms that place executives at these firms
investment bankers. have also cut staff. Ive seen this type of thing happen
Such down cycles are part of life in any industry. in the past, says Mary OGorman, a New Yorkbased
But thats little comfort for the thousands of business financial services recruiter for executive hiring firm
Prep Guide

and economics students who will be entering the job Snelling. But this is one of the worst downturns that
market in 2008 and 2009 and were hoping to start Ive ever seen. Every day theres more bad news, more
their investment banking careers. Even in good times, layoffs. I think this is going to last a while.
competition for investment banking jobs is fierce. Says New York based financial services recruiter
Now with a smaller number of openings, they will face John Mazzei: Business has trickled to an all-time low.
steeper odds in securing a position. Whats more, even Were hardly seeing any hiring.
the worlds investment banking leaders, who must be Overall, according to Dealogic, the respected
optimistic by virtue of their position, do not expect a investment banking research organization,
turnaround soon. organization, U.S. banking fees fell 48 percent in the

Consider that Goldman Sachss first-quarter net first quarter compared to the same period a year ago.
revenues of $1.17 billion represented a drop of 32 First-quarter lending revenues plummeted 84 percent,
percent from the same period a year earlierand the mergers were off by half, and debt and equity levels
New Yorkbased investment banking pacesetter was declined 21 percent. Is this going to be a challenging
better off than a number of its main competitors. environment? asks Doug Rickart, the Minneapolis-
Net revenues for JPMorgan fell 52 percent from based division director of Robert Half Financial
$6.25 billion to $3.01 billion. Merrill Lynchs net Services Group. Yes.

revenues dropped 69 percent to $2.9 billion. Then Yet if youre intent on investment banking and
A Students

there was poor Bear Stearns, one of Wall Streets possess the grades and extracurricular background to
best-known brands, well-respected for how it treated compete, dont let the latest conditions discourage you.
employees. The firm toppled in the mortgage crisis Investment banks will always need people to perform
and was peddled in May 2008 to JPMorganwith the junior-level tasks that are vital for deal-making and

At a glance
other investment banking activities. They will need Investing, your favorite). You desperately want to be
young bankers who can move up the ranks and fill an investment banker and consider yourself an ideal
positions vacated by more experienced hands. The best candidate. Your GPA never once dipped below a 3.6
banks are proactive about hiring the best recruits and you aced every standardized test thrown your

The Interview
even in down times. They know that they cant afford way without so much as a single prep course. You
to lose talent to their competitors. are a natural-born leader. You are well-groomed and

Ready for some hard work? It may take all your have never been rejected from anything you have ever
powers of presentation and persuasion to land a plum applied to. You are a shoo-in at any firm. Right?
position in late 2008 and early 2009. Students will Wrong. Unfortunately (or fortunately, if this doesnt
have to be incredibly focused with their job search, quite describe your accomplishments to date), for the
says Connie Thanasoulis. They will have to have first time in your life, all this is not enough. Have you
exceptional resumes and interview skills. They will given thought to how your hand feels when someone

The Interview
have to make career services counselors earn their shakes it? Or how you would react if an interviewer
money. You have to go the extra mile. started to read the paper at the exact moment you

Our number one recommendation? Get ready to entered the room? Can you do a back-of-the-envelope
sell yourself! valuation of a company? Do you know what an
investment banker does and why you want to become
one? Do you know how to sell your biggest weakness
as a strength? Can you differentiate one investment
Youll be nothing if you bank from another? If you hesitated and had to think
cant network. Tap into your about any of those questions, then youre not ready for
network of people who you your investment banking interview. The key word here

Prep Guide
is preparation.
know can help you and with Thats where WetFeet comes in. This Insider Guide
people who you might not is designed to help you understand and prepare for the
investment banking interview process. In researching
think can help you. You have this guide, we interviewed recruiters at most of the
to go the extra mile.Connie leading investment banking firms, including Bear
Stearns, Credit Suisse, Goldman Sachs, JPMorgan
Thanasoulis, SixFigureStart Chase, Merrill Lynch, Morgan Stanley, and others.
In addition, we surveyed hundreds of people like

you: WetFeet customers who have gone through the
investment banking interview process. And we came
up with a number of common themes and interview

Overview techniques. In this guide we will try to explain the

process and help you prepare to face the situations
youre likely to encounter.
Congratulations. Youre about to graduate Our number one recommendation? Get ready to

with honors from a top-tier undergraduate or MBA sell yourself! Much of banking is about old-fashioned
A Students

program. Okay. You were president of the debate selling, and it starts during the interview process.
society, have played the stock market since age It doesnt matter which area of banking or position
three, and read The Wall Street Journal cover to cover youre pursuing. Interviewers tell us that they will be
every morning (starting with the section Money & looking at your enthusiasm for the profession and


At a glance
Beat the Street: Investment Banking Interviews

their firm plus evidence of your desire to work hard, the most part, the recruiting efforts on campus follow
embrace challenges, and learn quickly. They want to a relatively structured process, as outlined below.
see self-confidence, proof that you can juggle multiple Moreover, there is little variation among firmsmost
complex projects, and a can-do attitude. will come on campus in rapid succession. Although
The Interview

Positions vary significantly in investment banking. firms do occasionally make exceptions, most hire the
The candidate with the perfect fit for one job doesnt bulk of their candidates through the process described.

necessarily have the makeup for other ones. Therefore, So if you want to land one of these jobs, you should
its critical that you know the position you want before acquaint yourself with the schedule and make sure that
you start interviewing. you dont miss the resume drop-off deadline.
Firms have different cultures, too. You should
know which one is right for you. To determine this,
Recruiting Season
youll need to take an honest look at yourself. Where
MBA Summer 2nd-Year
The Interview

do you excel? What are your weaknesses? Whats your Undergrads

Interns MBAs
preferred work environment and management style? If

you can answer these questions, youre more likely to Campus

Info Oct.Nov. Jan.
make a wise career decision; walk in blindly and you Sessions
risk making the wrong choice.
Nov.Jan. Jan.Feb. Oct.

The Bottom First

Dec.Feb. Jan.Feb. Nov.Dec.

Line Super
Prep Guide

Jan.Mar. Feb.Mar. Nov.Jan.



Investment banking interviews are highly

competitive. In the end, what will likely set you apart Step One:
from the rest of the field is your ability to convince Campus Information Sessions
interviewers that you are fully committed to this career These informal information sessions are a time to eat
and that you have the right skills and personality to well and learn about each firm and its recruiting process.
succeed. Read any firm-specific literature you can find (If your school is not on the tour, the information
(including, of course, the WetFeet Insider Guides on session at a nearby school may still be open to you. Call

various investment banks), talk to friends and alumni and ask permission; you will rarely be told to get lost.)
in investment banking, and bone up on your finance. Make sure your clothes are wrinkle-free and show up on
time. The recruiters generally bring a current associate
or analyst with them. After a brief speech, they take

The Process questions. This is not the moment to impress them with
your financial acumen; its a time to find out how many
analysts or associates theyre hiring this year, when and
The biggest feeders for most investment banks

how you should sign up for the first round of interviews,

A Students

are the undergraduate and MBA programs at top whom they see as their competition, and what they feel
universities around the country. In good years, is unique about their organization. (Memorize their
Goldman, Merrill, Morgan Stanley, and the others answers to this last question. At a future interview, this
hire thousands of candidates from these programs. For will gain you points.)

At a glance
While milling around the food tables afterwards, people. After brief training in the fundamentals of
engage an analyst or associate in conversation. They accounting and finance, analysts typically join an
are currently in the thick of the job and are therefore industry group. From that day on, they will work
among your best sources of information. Even 80 to 120 hours per week. They will be responsible

The Interview
if youre unable to lob a question or two in their for gathering data, building and updating computer
direction, keep within earshot and listen to their models, and coordinating productionin other

answers to other peoples questions. Ask for names words, doing the scut workfor lengthy transactions.
and work numbers (get business cards when you can), Associates may do some of the above but also manage
and find out whether these contacts would be willing a flock of analysts and participate in client relations.
to speak to you over the phone. (If theyre swarmed They have been hired not just for two interim years,
on campus by job seekers, this is often a better way but with the hope that they will remain with the bank
to get their attention.) Try to remember any details for the long term.

The Interview
the analyst or associate divulges. These may come in
handy in future interviews. Mergers and Acquisitions (aka M&A)

Depending on the bank, M&A may be a separate
Step Two: unit or it may fall within the corporate finance
Researching the Job Areas arena. The work involves advising companies that
Still think you want to do this? The first step: Begin wish to merge with, or acquire, others. As with
researching the different areas within investment CorpFin, M&A generally revolves around the deal
banking and the positions available. We focus here of the moment and can be unpredictable. With its
on jobs for undergrads and MBAs, since these are the emphasis on comprehensive quantitative analysis and
slots recruiters must fill by each August. Nevertheless, extensive back-and-forth with attorneys, M&A work is

Prep Guide
this information will also be useful for mid-career particularly unforgiving to bankers personal lives: The
candidates seeking to enter at a higher level. Basically, large-scale deals that are common here require long
the work falls into four principal areas: corporate periods of intense work. M&A specialists will often
finance, sales, trading, and research. These areas are so be found poring over spreadsheets and proofreading
different from one another that most banks wont look memos well into the night. And just because a big
kindly upon people who apply for positions in more transaction has been finalized, thats no guarantee of
than one area (the implication being that you dont downtime: It isnt unusual for bankers to move from
know what you want to do). one big project to another without coming up for air.
Hiring practices vary from bank to bank, but typically

Corporate Finance (aka CorpFin) M&A divisions hire both undergrads and MBAs.
Corporate finance is an umbrella term for the work
involved in capital raising, underwriting, and financial Research
advisory services, including mergers and acquisitions. Investment banks are sell-side, meaning theyre
Every year, corporate finance divisions conduct a formal involved in selling securities (as opposed to buy-side,
search for both undergraduates and graduate students, meaning they buy securities, such as mutual funds).
generally MBAs, to fill their training programs. The research departments spend their hours studying

Undergraduates are hired for two to three years financial data, interviewing people in the industries
A Students

and hold the title of analyst, while MBAs and other they cover, writing about specific companies and
graduate students and graduates are dubbed associates. the economy, and making recommendations about
Depending on the firm and its needs, an analyst purchasing and selling financial instruments. Good
or associate class numbers anywhere from 20 to 90 research is the cornerstone of a banks selling franchise;


At a glance
Beat the Street: Investment Banking Interviews

basically, the firm is selling its ideasits research formal as it is in investment banking. Recruiters pay
which clients purchase through their transaction less attention to top-tier schools. Be prepared to cover
costs. A limited number of positions in research are expenses to New York for your first interview.
available each year. Heres a quick warning: Research Nor is there much formal training. Quite simply, in
The Interview

departments reverse the title hierarchy of CorpFin sales, you sell. You spend agonizing weeks, sometimes
and M&A divisions. People coming in from college months, smiling and dialing your way through the

programs hold the title of associate, while the stars phone book on cold calls to complete strangers. The
pulling down seven-figure salaries are analysts. school-of-hard-knocks culture makes sales and trading
This is nice work if you like reading and crunching jobs less coveted than other banking positions. In the
numbers, but not if you crave company. The research words of one S&T recruiter: There are fewer people
associates job is solitary, although top analysts are pandering to get in here. Still, it isnt a cakewalk:
frequently asked to make presentations. Traders are perhaps more wary than other bankers
The Interview

about whom they hire, since money paid to a junior

Sales and Trading (aka S&T) person comes directly out of their own pockets.

Jobs in this area are split between institutional sales There are plenty of trading desks staffed by Harvard
and trading and then broken down further between MBAs who spent summers in the Hamptons or on
equity (stocks) and fixed income (bonds). If you the Cape. But more typically, traders boast what one
want to be a trader, you also have the choice between former Wall Street master of the universe called a PSD
trading for the firmproprietary tradingor trading (Poor, Smart, and a Desperate desire to be rich) degree.
for clients. With the former, youre investing for Bottom line: Produce and no one will care where you
one or more of the firms funds or other investment went to school.
vehicles. In the latter, youre trying to generate returns
Prep Guide

for outside funds, organizations, and even high-net-

worth individuals. Both require the same skills: self- Career Fairs
confidence, an ability to act quickly and decisively, and
a keen understanding of financial markets. We can sum up the you should already
At most banks, undergraduates and graduates join notion of one-stop job have suspected:
shopping at a career No one considers a
a training program and then begin a series of rotations
fair with a familiar resume submitted
until they find a permanent home. Unlike CorpFin, phrase: If it sounds at a fair as an official
where your education and title count for a lot, on the too good to be true, application. A former
sales and trading floor only one thing matters: making it probably is. The investment banking

idea that you could analyst who used to

money for the firm. Hours are driven by the market give your resume to represent a firm at
when the market where you work is in session, youre 100-plus companies career fairs recalls
on. The trading floor is a poor choice for anyone with in a single meeting that the recruiter
genteel sensibilities: Its definitely more rough-and- place, go home, relax, usually trashed all
and wait for calls is the resumes shed
tumble than other areas of banking. The atmosphere is a job seekers pipe collected before she
fast-paced and rugged, and traders may not have time dream. Investment returned to the office.
for more than a few bites of their lunch. But the hours banking recruiters Instead, use the fairs
acknowledge what to gather information.

are more reasonable. You are likely to be heading home

A Students

by 6 p.m. while your CorpFin colleagues still have

hours to go on their workdays. Step Three: Resume Preparation
With the exception of a few bulge-bracket firms, Now that youve targeted your desired area within
the recruiting process for sales and trading is not as investment banking, its essential to distinguish

At a glance
yourself from your peers with a well-crafted one-
page synopsis of your academic, extracurricular, and Top Resume Red Flags
professional experience. Remember that banking is
Misspelled words or grammatically incorrect sentences
about selling, and your resume is like a salespersons

The Interview
talk sheet. Highlight your strengths and abilities, Incorrectly spelled firm name (watch where they put the
and show your suitability for your targeted job area.

Since the competition officially begins once you drop Extremely low GPAs (or one that is noticeably absent)
your resume off at the career center or send it to the
Resumes that are unduly long
firms headquarters, and since the top banks receive
thousands of resumes per season, this is the first Misstated objectives (for example, I want to work for a small
hurdle. And its a tough one. Recruiters rarely spend firm in a letter to Merrill)
more than a minute on a resume, and usually less than

The Interview
20 seconds. Because of the avalanche of paper they Bad mail merges, resulting in a different firm on the cover
receive, they look for red flags that will allow them to letter than on the envelope

toss your resume in the wastebin. (See Top Resume
Long-winded sentences
Red Flags sidebar on this page)
The goal of the resume is to win you a spot on the
Colored paper and nontraditional fonts
interview schedule. A current MBA student wisely
advises: There are so many aspects of this process that
you cannot control, so control what you can. Let them Step Four: The First Interview
know that you understand the rules of the game. The recruiting tour bus arrives on campus to see what
In other words, dont make mistakes that will allow the candidates look and sound like in a suit, under

Prep Guide
recruiters to disqualify you. A word of warning: Lying stress, in 30 minutes or less. (If your school is not on
or misrepresenting yourself on your resume hardly ever the tour, your interview will most likely be held at
goes unpunished. Despite the legions of apparently corporate headquarters.) For this first of what you hope
unconnected bankers trawling Wall Street, the Street will be many conversations, you should dress well and
is in many ways like a small townpeople know be prepared to sell yourself. A human resources recruiter,
each other and they love to gossip. Recruiting stories junior associate, or, sometimes at headquarters, a mid-
travel like wildfire. Even if you succeed in securing level banker will conduct the first interview.
an offer with a false or misleading resume, you may Insiders tell us interviewers are generally looking
suffer the ignominious fate of having your offer for you to communicate two points clearly: (1) why

revoked or withdrawn. Dont test the limitsputting you want to be in investment banking and (2) why
a favorable spin on a past accomplishment is different you want a job with this firm. Investment bankers deal
from fabricating one altogether. And dont overstate with numbers all day, every day, so be ready to rattle
your verifiable talents. For example, it is not entirely off your SATs, GMATs (if interviewing for a graduate-
impossible that someone along the interview chain level position), and GPA. No need to explain why your
will see a claim of proficiency in a foreign tongue and math scores lag 22 points behind your verbal unless
choose to conduct the interview in that language. they ask, though if there are some obvious and odd

In addition, many firms prepare a resume book of discrepancies, have plausible, brief answers ready. Do
A Students

new recruits for distribution firm-wide. Trust us that yourself a favor and do not exaggerate your academic
anything suspicious or overstated on your resume can and extracurricular experiences: More often than not,
be held against you by your potential colleagues. the recruiter will be an alumnus of your school and
can easily check your claims. You may find little time


At a glance
Beat the Street: Investment Banking Interviews

Dos and Donts of Resume Preparation

Dont Do
Be creative: This is not an artistic profession. Copy your resume onto the best white or off-white
The Interview

Refrain from sending your resume on brightly paper available (100% cotton bond). Many insiders
colored or marbled paper, using nontraditional say that theyve seen interviewers hold their resumes
fonts. up to the light: Theyre checking to see that the

interviewee has taken the trouble to use Crane paper

(with the watermark seal facing text-side up, of

Dont Do
Lie about or exaggerate your past experiences. Include items that show off your quantitative skills:
relevant course work, GMAT scores, math SAT
The Interview

scores, spreadsheet software and related programs


you know how to use (email and word-processing

programs dont count).

Dont Do
Write salary requirements on the resume. Make the objective on your resume consistent with
the firm and the position. Generalists need not apply.
If youre still uncertain whether your destiny lies in
IT consulting or fixed-income trading, design two
separate resumes.
Prep Guide

Dont Do
Offer too much. You are far too young and Proofread for typos, grammar, and sense. Typos
inexperienced to have a resume that goes on for will land you in the garbage before the recruiter has
pages. A college or MBA students resume should time to process your name. Subjects and verbs must
usually fit onto one page. agree. Unless universally understood, abbreviations
are almost always a bad idea.

Dont Do

Lie about your foreign language skills. When an


Mention, without exaggerating, the foreign languages

applicant claims fluency in a foreign language, you know.
he or she should be prepared for at least one
interview in that tongue.

to ask questions, but err on the safe side and prepare enough to get an invite to the final round. Whatever you
a few about the firm and the job itself. Make them do, dont let it go to your head. Final is a misnomer

good questions, not lightweight puffballsintelligent, here; this is merely the filter that separates the capable
A Students

careful queries that dont require long answers. from the extraordinary. After youve been notified by
phone, youll be flown to corporate headquarters and
Step Five: Final Interviews thrown together with a small army of other hopefuls
Within a day or so you will know if you were loved for an evening of wining and dining and a full day of

At a glance
interviews. More than likely, youll be staying in a posh
Manhattan hotel. But you wont see much of it. Alternatives
At this point, the firms assume that everyone
assembled is capable of doing the job. Now theyre to

The Interview
assessing your personality, your behavior in a social
and professional context, and whether you are the The Process

right match. This is your moment to emerge from the
pack and demonstrate your own unique qualities. Be Not in school? A foreign student? Recruiter
yourself and stay focused. doesnt come to your school? You can still get an
You will meet with roughly six or seven bankers interview. And you can still get a job in I-banking.
of varying seniority for half an hour or more each. Heres what our insiders recommend if you fall into
Sometimes youll be grilled one-on-one, other times one of these categories.

The Interview
two-on-one. Heres what theyre looking for: how
youd fit in at Bank X; why you want to work at Bank Mid-career Hires

X (instead of equally good Banks Y and Z); whether If you already work on Wall Street, you know where
you can crunch numbers accurately and never miss a to goand youre probably not reading this guide. If
typo; and, perhaps most important, the likelihood that youre coming from another industry, youll probably
youd accept an offer (bankers dont appreciate having have a tougher time. Everyone is happy to hire lawyers
their egos bruised by a recruits No, thank you). who are fully proficient in banking or, on the research
Your potential colleagues also want to make sure they side, people with deep industry experience. And a
wouldnt hate sharing office or airplane space with you. few firms are willing to take a chance on a brilliant
academic. But most tend to fill the gaps in their

Prep Guide
Step Six:

analyst and associate pools with men and women who
The Offer and Courting Process have worked in a similar capacity for competitors. If
If youve successfully demonstrated your fealty and you are a lateral hire, the good news is that you dont
ability, the phone will ring several days after the final have to suffer at your current job waiting out the long
round of interviews. (Some firms conduct third-round recruiting season. Throughout the year, recruiters
interviews, which are typically similar to the second scurry around to replace those analysts or associates
round, before extending offers.) In most cases, it who have either defected or fallen off the corporate
makes sense to remain polite and noncommittal. You track. Because lateral hires are typically not interviewed
will field phone calls from several members of the firm during the normal training-program season, they

telling you their lives will be empty without you. Youll usually begin their new jobs without much, if any,
be invited to a special dinner in New York. There, the formal training.
firm will give you the hard sell and a date before which
they would like you to decide. Enjoy the attention for Foreign Students
a while and then, if youre sure about the decision, say For foreign nationals who lack the right visa status
yes with enthusiasm. If youre lucky enough to have to work in the U.S. after attending an American
several suitors clamoring for you, say no to the rejects university, the process is less complicated than you

as gently as possible: You never know when you may might think. Investment banking is an increasingly
A Students

wish to rekindle their interest. global enterprise. Recruiters unanimously agree that
candidates who are not U.S. citizens are treated the
same as any other applicant; your working status is not
an issue. In fact, your proficiency in several languages


At a glance
Beat the Street: Investment Banking Interviews

and close ties to your own country may give you a interest in investment banking when she flew to New
highly desirable edge. If you receive an offer, the firm York to meet with us and several other firms over her
will arrange your visa and, after a given number of Thanksgiving break.
years, your green card. Most insiders concede, however, that candidates
The Interview

from lesser-known schools need to have either stellar

Help! work experience or the ability to fill a unique need at

I dont have a prestigious undergraduate degree the firm, particularly for CorpFin positions. It also
and/or I attend a second-tier MBA program. Is all helps if they have previously worked with someone
hope lost? in the firm who can serve as a reference. At the same
No. If the top firms analysts all appear to be time, several recruiters for sales and trading reveal
summa econ graduates of U.S. News & World Reports that they interviewand hiremany graduates from
Top 10, or if the associate class seems to have been no-name undergraduate schools or MBA programs.
The Interview

culled from the ranks of former analysts or the Penn One insider explains that if you went to a lesser known
and Harvard Clubs, youre not far off. Investment institution you need to be prepared to give a valid

banking firms are disproportionately staffed with Ivy reason. The best reason, as you might guess, is that you
Leaguers and top-tier MBA graduates who get scooped received a full scholarship. And if youve already had a
up on the recruiting tour. But there is no need to give lot of relevant experience, the good news is that where
up just because the scoop never came for you. There you went to school has much less impact on your
is a way in, albeit a more difficult one. If youre going candidacy.
to be the exception, you need well-honed interviewing
tactics. Preparation, strategy, and aggressive but
discriminating networking will all help get you the job.
Prep Guide

The first step is networking. Do not waste postage

blindly mailing your resume to every firm. Focus
instead on setting up appointments with industry
insiders, either through introductions from friends
(or even friends of friends) or by targeting alumni
of your school who work on the Street. Ask lots of
thoughtful, informed questions and demonstrate
your commitment to investment banking. Keep in
mind that, like the S&T hopefuls, you will probably

have to fly yourself to headquarters (most likely New

York) on your own nickel and pay for your lodging.
This show of initiative may just be your ticket in.
Remember: Being hungry for an investment banking
job is at least as important as having a top-tier school
on your resume. What really makes a candidate stand
out is enthusiasm and commitment to the work.

One recruiter told us of a candidate she hired from

A Students

a school where the firm does not recruit: On top of

her excellent academic and professional experience,
I was so impressed with her initiative to seek out
several people in the firm. She demonstrated a genuine

The Interview The Interview Interview Interview A Students
At a glance Process Unplugged Prep Guide Workbook Perspective

The Interview

Preparing Yourself for
the Beauty Contest..........................18
Review........................................... 20
Investment Banker Speak............... 28
At a glance
Beat the Street: Investment Banking Interviews

Preparing Research Tips

Yourself for Good Sources of Information about Banks

the Beauty
The Interview

Second-year MBAs who worked as summer interns in the



First-year associates who are alums of your school

Classmates who worked on the Street before business school

Okay, youve read the brochures, surfed the Friends of friends who work on the Street
Web, and talked to alums working on the Street, and
youve decided that you want to find your own place Any alums of your school
The Interview

in the world of high finance. How can you land one

of these jobs? The same way youd go about doing WetFeet Insider Guides

the job once youre there: with careful preparation discussion boards
and attention to detail. We call this the Three Rs:
Research, Rehearse, Review.
Other Sources That May Also Be Helpful

Company websites

Research Company representatives at info sessions and career fairs

Prep Guide

The first step in any successful job search


Day-on-the-job programs
is research. Not only do you need to know the
positions, you also need to know the players and their Informational interviews with current employees
distinguishing characteristics. Why? Because, as weve
said before, youll need to convince your interviewer Business publications including The Wall Street Journal,
Investment Dealers Digest, Institutional Investor, and others
that you are the perfect person for the particular job at
his or her bank. Your resume, your answersindeed,
your entire personamust be steeped in corporate of firms likely to send you abroad is quite short. If
finance (or whatever job area youve selected). this is your goal, it will take you only a few minutes

And although the jobs within each area tend to be to learn everything you need to know from a firms
numbingly similar at all firms, each institution has its annual report. Youll determine which firms offer
own culture and expects applicants to be aware of this. the best opportunities abroad. Youll also be able to
It is also worth learning the differences among firms so impress your interviewer with your knowledge of the
you can be sure to find a good fit. companys business mix.
For instance, lets say you speak several languages If youre concerned about other issues, such as
and the international aspects of investment banking friendliness to women or minorities, you may have a

are one of your chief reasons for reading this far. harder time. These topics can be sensitive. Recruiting
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Every bank describes itself as global these days, but material would have you believe that a harmonious
the number of overseas offices, how much revenue rainbow coalition reigns throughout, from the research
these outposts generate, and how many U.S. citizens cubicles to the trading desks. To get the real story,
actually get to work in them may vary. In fact, the list youll want to talk to real employees. Youll want

At a glance
to read about companies in the press (and WetFeet
guides), discuss them on WetFeet.coms discussion
boards, and see if they come up in Fortunes 100
Best list. Unfortunately, the reality at many firms is Investment banking interviews arent a mystery.

The Interview
far from the glossy image they try to project. Also, You already know what 75 percent of the interview will
be wary of the term entrepreneurial, which appears be: questions about you and your accomplishments.

frequently in investment banks self-descriptions. For You may think this is the easy part. But most people
those of you who have worked with real entrepreneurs, have a hard time talking about themselves. According
you know that investment banks are about as close to to our conversations with recruiters, in a schedule
the genuine article as GM is to a startup. In banking of ten people, several will get knocked out of the
lingo, entrepreneurial means being able to shine competition because they were unable to explain their
with little oversight. At certain firms, it may mean accomplishments clearly and effectively and relate

The Interview
doing every possible type of work from picking up them to a specific job. Make sure you dont become a
someones dry cleaning to meeting with the clients top statistic! The best way to do this? Practice your pitch!

management. And never complaining. Or bragging. It may sound dumb, but we recommend writing out
Real entrepreneurs tend to do poorly in investment an elevator pitch about who you are and what youve
banking, because theyre too independent and dont done. In other words, imagine that you get on an
like working under layers of people. elevator with the president of the company. You have

[ The Wetfeet Interview Coach]

Write out your elevator pitch here. Who are you, what have you done, and why does that make you the best person

Prep Guide
for the job?

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At a glance
Beat the Street: Investment Banking Interviews

his undivided attention for about the next 15 seconds, Because of the long hours bankers log at the office
before he steps off the elevator. Your pitch has to be and with one another, candidates are often asked about
short and convincing. The key elements here are to the items on their resumes that might indicate whether
convey your past accomplishments clearly, succinctly, theyd be an interesting and entertaining company
The Interview

and in a way that emphasizes the unique reasons why late at night. You may want to include something
you would be the perfect candidate for the job. more than the standard blue-pin-striped-suit sort of

In addition to rehearsing your elevator pitch, accomplishment on your resume. The usual place for
youll want to try to anticipate and prepare for other this is in an Other section, which should appear at
scenarios you are almost certain to encounter. Not the bottom of the resume. Remember, though: If you
only will this help you perform better, it will also help do mention your interest in medieval Japanese history,
show your sensitivity to the realities of the profession. its entirely possible that one of your interviewers will
Bankers are chronically short of time, so securing a ask you what you think made the Tokugawa regime
The Interview

bankers undivided attention is a boon that should so successful. At the same time, you might not want
not be wasted. Come prepared. What does that mean? to mention interests that could offend someone. For

Here are a few suggestions from our interviewees: example, politics, religion, and certain types of music
and art can hit the wrong nerve. If you have any
Prep yourself to discuss anything and everything doubts, its probably a good indication that you should
that appears on your resume (and make sure you avoid a subject.
can account meaningfully for any time gaps).

Be prepared to explain convincingly why your

greatest weakness is actually a strength. Review
Prep Guide

Practice your handshake (firm, but not vise-like) Get out your old textbooks; its time to review.
and your ability to talk and listen while looking Insiders tell us that investment banking interviews
directly into your interviewers eyes. dont usually involve the same heavy-duty case
questions found in consulting interviews. But youre
Get comfortable with basic valuation still going to need to know your way around basic
frameworksunderstanding fundamentals is corporate finance and accounting issuesespecially
more important than mastering lingo at the if youre coming from B-school. (Undergrads, breathe
interview stage. easy: You can impress your interviewer by knowing

this stuff, but its not de rigueur.) You should review

Draft specific questions for your interviewers that basic concepts from CorpFin and Accounting 101.
will demonstrate your interest in their firm. To help you with this, WetFeet has dusted off an old
finance textbook and prepared a quick review of basic
Read The Wall Street Journal and Business Week finance tricks that might help you in your interview.
to familiarize yourself with current business
conditions. Youll need to know at least the Valuing a Company

companies involved in any sizable deal. Investment Company valuation is perhaps the most important
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Dealers Digest is a good quarterly source for service provided by investment banks corporate
this information, and also publishes the league finance groups. Indeed, it underlies taking companies
tables, which rank the banks in such areas as public, buying or selling companies, and deciding
IPOs and mergers and acquisitions. whether to repurchase stock. Accordingly, many

At a glance
interviewers will ask candidatestypically MBAs, often a poor proxy for cash flow, analysts will carefully
though undergraduates who claim some prior calculate free cash flow by starting with EBIT
valuation experience may get these questions as (earnings before interest and taxes), taking out taxes on
wellto walk through the valuation of a hypothetical those earnings, and adding back interest, depreciation,

The Interview
enterprise. MBAs bucking for associate positions will amortization, and other cash-affecting items.
be held to a higher standard than undergrads vying Although business school professors love the

for analyst openings, since MBA candidates who have mathematical clarity of this means of calculating the
been analysts will have had some experience with value of a company, real bankers tell us that this method
valuation. They will also have covered valuation in is rarely used as the key valuation technique in practice.
classes. Undergrads taking high-level business classes, Why? Relying on historical earnings or cash-flow
or who have served as interns with financial services growth to estimate future flows is dubious, particularly
organizations, will have also learned about valuation in industries undergoing rapid technological

The Interview
but to a lesser degree. Recruiters are generally more change or consolidation, or experiencing heated
interested in evaluating candidates logical thinking competition. Consider the case of the deregulated

than in having candidates arrive at a particular telecommunications industry: Fierce competition has
number. However, you should at least be aware of the made firms vulnerable to a reduction in future cash
different methods of valuing a firm. Two of the key flows as more companies have rivaled for market share.
ones are discounted cash flow and market multiples. The appropriate discount rate depends on the
companys likelihood of realizing projected cash flows.
Discounted Cash Flow Many times, this calculation uses the risk-adjusted
Theoretically, the most accurate valuation technique rate of return for a peer company, especially if the
is the discounted cash flow (DCF) method. The competitors stock is already traded in the public

Prep Guide
assumption underlying DCF analysis is that a firm is a market. While a constant discount rate is commonly
collection of projects which each generate (or absorb) used to calculate the value of future cash flows, an
cash. Because an investor is buying the rights to these analyst should consider whether a firms discount rate
projects, a firms value is determined by valuing the net should vary over time, reflecting different risk levels for
sum of their future cash flows. each projected cash flow.
Calculating DCF involves three steps: (1) estimating Taking the present value of, or discounting, future
the future cash flows generated by a firms operations, expected cash flows is relatively easy with either a
(2) choosing a discount rate which reflects the perceived handheld calculator or a spreadsheet software program
uncertainty of those estimated cash flows, and (3) (both of which will be provided by whichever bank

calculating the present value of projected cash flows. you join). If the pro forma cash flows are the same for
Determining projected future cash flows (known the time period in question, the problem reduces to
as pro forma cash flows) can be done several ways. An the present valuation of an annuity. If the cash flows
easy way is to take the current years reported earnings are different, then each cash flow must be discounted
(that is, the companys after-tax net income) and individually and then summed to find the present
multiply by some number such as the average earnings value of the cash flow bundle.
growth rate for the last five years. This gives projected
Market Multiples

net income for next year. Usually, earnings are

A Students

projected for the first five to seven years, after which a While DCF is arguably the most theoretically accurate
terminal value is added. (The terminal value is equal means of valuing a company, in practice bankers rely
to an annuity beginning in a future year, discounted much more heavily on the market multiples method
back to the present.) Since accounting income is to appraise firm value. (Often DCF is used as a


At a glance
Beat the Street: Investment Banking Interviews

Cash Flow Formulas

The Interview

Discounted Cash Flow

The basic formula for discounted cash flow analysis, in its most simple, is:


Free Cash Flow (year 1) + FCF (year 2) + . . . + FCF (year 5) + Terminal value
(1 + unlevered rate of return) (l + r)2 (l + r)5

Free Cash Flow = E

 BIT (earnings before interest and taxes) - estimated taxes on EBIT (at the companys
tax rate) + depreciation + amortization - capital expenditures and networking capital
requirements -/+ any other changes that will cause the company to spend cash or will
be a source of cash to the company (such as severance payments or an expected legal
The Interview

Unlevered rate of return = ( Risk-free rate of return + (stock beta * (return on market
portfolio - risk-free rate of return))
The risk-free rate of return is the 1-year T-Bill rate, the stock beta comes from
a standardized beta book produced by one of the big investment banks or
Bloomberg, and the return on a market portfolio is the 52-week return on the
S&P 500.

Terminal Value = Value of an annuity in year 5 or 7 discounted back to present.

reality check on the accuracy of a multiples analysis.) determining the appropriate metrics and multiples
Prep Guide

Fortunately for analysts and associates, the multiples to use for valuation purposes. This entails setting
method is considerably easier and less time-consuming out the market capitalizations (that is, share price
than DCF, and is more readily understood by clients. multiplied by number of shares outstanding) and
Multiples analysis is predicated on the assumption publicly reported financials for the various comparable
that markets value similarly situated firms using the firms selected in step one, and searching for patterns
same metric or set of metrics, such as a multiple of in the numbers. (Typically, more-senior bankers will
revenue, cash flow, or accounting earnings. Thus, there direct the analysts and associates working with them
are essentially two steps to valuing a company using on where to look for patterns.) If you analyzed the
the multiples method: pharmaceutical industry, for instance, you would find

1. Identify a set of comparable firms. that the market capitalizations for the major players
2. Determine the appropriate multiples to be used. have a multiple of revenue of about 2.5x to 5x. The
The first step is highly subjective; it involves market capitalization of firms in other industries
assessing the core business (or businesses) of the may be a function of different metrics: For example,
company being valued, and identifying the publicly department stores may trade as a multiple of total
traded companies with similar or identical core retail outlets, self-storage property operators may trade
businesses. There is considerable art in appropriately as a multiple of rental income, and so on.

defining a companys core business, even when a firm Multiples analysis is an iterative processonce
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is relatively focused. But this assessment determines you complete step two, you must step back, analyze,
the comparison set of companies, which in turn will and evaluate whether you need to change any of
determine the valuation. the assumptions from step one. For instance, in the
The second step of multiple analysis involves pharmaceutical industry, Pfizers market capitalization

At a glance
toward the end of June 2002 was about 6.5x its financial statements generallynamely, that historical
revenue. Obviously, if you were to include Pfizer in acquisition cost of assets may misstate their current
your average revenue multiple, you would emerge with replacement cost or net realizable value, and that firms
a larger valuation for the firm you are analyzing than have wide latitude in selecting from among various

The Interview
is probably warranted. Before discarding it, though, generally accepted accounting principles.
you must theorize why Pfizers multiple broke the Even after accounting for these caveats, it is hard

pattern. Perhaps its size justified a higher multiple. Or to say what constitutes a healthy ratio. General
it might have been its advantages as a first mover. You wisdom suggests an average value of 2.0 and 1.0 for
should only use an outlier multiple if its presumed the Current Ratio and Acid Test Ratio, respectively.
explanation applies to the firm you are valuing. The Higher liquidity ratios are considered good, except in
iterative process should continue until you have the case of the Cash Ratioa very high Cash Ratio
arrived at a defensible valuation, substantiated by may suggest poor cash management (See next page for

The Interview
a DCF analysis. It is mastering the art of multiples the formulas for theses ratios). Leverage ratios provide
analysis that sets experienced bankers apart from their a measure of how much debt a firm uses. As with most

less experienced junior colleagues. Understanding at things, debt is generally considered acceptable if used
least the fundamental concept of multiples analysis at in moderation. High leverage ratios indicate a firm
the interview stage will give you a definite advantage that may be unable to repay interest and principal
throughout the recruiting process. on time, especially during a recession, when profits
tend to trend downward. However, many companies
Financial Ratios prefer to maintain higher leverage ratios because of the
Ratio analysis is an important part of any financial positive impact on asset utilization and profitability
study of a firm. There are many categories of ratios, ratios.

Prep Guide
each serving a distinct purpose. It is unlikely that a
candidate with no expressed familiarity with ratios
would be questioned about them in an interview.
Nevertheless, for the sake of thoroughness, you may
want to brush up on the common financial ratios. (See
Key Financial Ratios
box in the next column.)
Liquidity ratios: Used to evaluate a firms short-
As with company valuation, interpreting financial
term liquidity, measuring its ability to pay wages,
ratios is more an art than a science. Generally, ratios short-term creditors, taxes, and interest on bonds
are evaluated for a firm over time, or are compared without delay.

with industry averages. Most research analysts do both. Leverage ratios: Used to evaluate a firms
creditworthiness from a long-term lenders
When comparing a particular ratio between periods perspective.
for the same firm, you must recognize conditions that Profitability ratios: Used by prospective or
have changed between the periods being compared existing shareholders to evaluate a firms past
(different product lines or geographic markets served, earnings, its potential for future income growth, and
how much profit is paid out to shareholders in the
changes in economic conditions, changes in prices). form of dividends.
Similarly, when comparing ratios of a particular firm to Asset-utilization ratios: Used to evaluate the

those of similar firms, you need to see the differences productivity of firm assets.
A Students

(in their methods of accounting, in their operations, Source: Financial Statement Analysis: Theory, Application and
Interpretation, 6th edition, by Leopold A. Bernstein and John J. Wild
in their types of financing, and so forth). Furthermore, (Irwin / McGraw-Hill, 1997)
remember that ratios based on financial statement
data are necessarily subject to the same criticisms as


At a glance
Beat the Street: Investment Banking Interviews

Below are the formulas for the most widely used financial ratios. See the table on
the following page for the definition of each abbreviation.

Financial Ratio Formulas

The Interview

Ratio Formula

Liquidity Ratios

Current CA / CL

Acid Test (aka Quick Test) [C + CE + MS + AR] / CL

Cash [C + CE] / CL
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Collection Period Average AR / [CS / 360]

Days to Sell Inventory Average I / [COR / 360]

Leverage Ratios

Total Debt to Total Capital [CL + LTL] / [EC + TL]

Long-Term Debt to Equity LTL / EC

Prep Guide

Times Interest Earned [IBT + IE] / IE

Profitability and Investor Ratios

Gross Profit Ratio GP / NR

Net Income to Sales NI / NR

Dividend Yield DPS / MPPS


Price to Book Ratio MPPS / BVPS

Price to Earnings Ratio MPPS / EPS

Asset Utilization Ratios

Sales to Fixed Assets NR / Average FA

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Sales to Total Assets NR / Average TA

Sales to Inventories NR / Average I

At a glance
Financing Strategies
Table of Abbreviations for Companies
Financial If youre applying for an investment banking job,
Statement your interviewers will assume that you have a solid

The Interview
AR Accounts Receivable Balance Sheet understanding of the financial aspects of managing
a company. Just in case you dont, heres the basic
BVPS Book Value Per Share Balance Sheet

info. Generally speaking, companies obtain the
C Cash Balance Sheet funds they need to sustain growth by selling stock
(equity) or borrowing (debt); by retaining earnings
CA Current Assets Balance Sheet
(not distributing profits to shareholders); and/or by
CE Cash Equivalents Balance Sheet selling off (divesting) noncore, nonstrategic assets.
The corporate finance group of an investment bank
CL Current Liabilities Balance Sheet

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advises companies on how to most efficiently and cost-
effectively finance growth. Corporate finance works

COR Cost of Revenue
Income with salespeople, traders, and research analysts to
CS Credit Sales
Statement determine the best ways a company might do this.
DPS Dividends Per Share None

EC Equity Capital Balance Sheet

Staying Abreast
of Current Events
EPS Earnings Per Share
It is imperative to stay on top of current events, financial
and otherwise, both during the interview process and
FA Fixed Assets Balance Sheet
beyond. Expect an interviewer to ask you about events

Prep Guide

GP Gross Profit
in the U.S. and abroad, especially financial activities.
Almost everyone on the Street reads the The Wall Street
I Inventory Balance Sheet
Journal; even though it has become more of a generalist
IBT Income Before Taxes
publication since Rupert Murdoch bought it in 2007,
Income its still a must-read for aspiring bankers. Other good
IE Interest Expense
Statement sources include the Financial Times and The Economist,
LTL Long-Term Liabilities Balance Sheet both valuable for their more international outlook.
Market Price Per An investment banker must know how to read
stock tables, tooafter all, thats where the money


MS Marketable Securities Balance Sheet
is made. One of the most important, the New York
Stock Exchange Composite Transactions, provides
NI Net Income information on stocks listed on the New York Stock
NR Net Revenues
Income Exchange. Information is also provided for stocks
traded on the American Stock Exchange and in
TA Total Assets Balance Sheet the over-the-counter market via the NASDAQ
TL Total Liabilities Balance Sheet
(National Association of Securities Dealers Automatic

Quotations) system. While explanatory notes for tables

A Students

TO Turnover None are provided in The Wall Street Journal online, it is

Note: Automated per and other sources. Per-share values worthwhile illustrating how information is reported.
come from financial statement values, which are divided by the number of Check out the following page for an explanation of a
common shares outstanding.
listing for General Electric Company.


At a glance
Beat the Street: Investment Banking Interviews

General Electrics Stock Listing

52 52
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Weeks Weeks
Hi Lo Stock Sym Div Yld % PE Vol 100s Hi Lo Close Net Chg

96 59 GenElec GE 1.20 1.5 31 96588 82 78 81 +6

The columns on the left reveal that Div is a measure of the dividend Multiply the volume number by 100
the stock traded in a range from $59 per share paid to shareholders. In to obtain an estimate of the number
to $96.875 over the last 52 weeks. this case, shareholders were paid a of shares of this stock traded on the
This price range has been adjusted healthy $1.20 per share. previous trading day.
for various types of distributions to
shareholders, such as stock splits The dividend yield of 1.5 is a mea- The stock traded on the previous
The Interview

and share dividends. (And if you sure of the dividend amount relative day within a range of $78.375 and

bought it at $59 and sold at its high, to the price per share of the stock. $82.25, and closed at $81.875 per
youd have made $37.87 a share, A stock price of $80 would yield 1.5 share, six dollars higher than the
less 30 percent capital gains. Not percent from the dividend of $1.20. prior days close.
The PE, or price-earnings ratio, says Excerpted from The Wall Street
The next column provides an that the price per share ($80) is Journal, 09/09/98
abbreviated company name, about 31 times earnings per share.
followed by the ticker symbol of the PE multiples vary over time and
stock. business cycles.
Prep Guide

General Accounting Information various types of stock outstanding plus accumulated

A public company must publicly disclose audited retained earnings. Relying exclusively on the balance
financial information at the close of each quarter, and sheet may be misleading: At times, firms engage in
must report a full 12 months of financial results at the window dressing (actions taken to strengthen the
end of its fiscal year every year. Many companies file balance sheet for a particular reporting date). In
their 12-month reports on a calendar-year basis; others addition, because assets are recorded at their historical
elect a 12-month period corresponding to their natural values (their market values at the time they were first
production cycles. There are four primary financial acquired), when the market value of assets declines,

statements: balance sheet, income statement, cash flow historical value overestimates the strength of the firm.
statement, and statement of retained earnings. Balance sheets may underestimate the financial health
of a firm as well. For example, they dont record assets
The balance sheet such as a talented, productive labor force, even though
The balance sheet is a snapshot, made on the reporting superior firms are often market leaders in large part
date, of a firms assets, liabilities, and equity. The asset because of their talented employees and managers.
column typically includes current or short-term assets

like cash, accounts receivable, and inventory; fixed Income statement

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assets such as depreciable equipment; and intangible (aka profit and loss statement)
assets like patents and trademarks. Liabilities include The income statement records information about
current obligations such as accounts payable and revenue, expenses, and profit for the firmhow
long-term debt. Shareholders equity consists of all the much money the firm made or lost in a given

At a glance
period. Although this is the basic statement used to and subtract dividends paid.
determine whether a company is profitable or not, A typical financial analysis relies on all four reports.
bankers will take a careful look at the numbers here to Footnotes to the statements are found in the back of
understand what they really mean. To the extent that the annual report and must be used to understand how

The Interview
financial accounting standards allow firm managers financial information should best be interpreted.
to record income statement items using one of several

different alternatives, the quality of earningsalso Stock Analysis
known as the bottom linevaries over time and Stock analysis is an integral component of a research
across companies. Often a financial analyst will make analysts responsibilities, and is relevant to the sales and
adjustments to reflect the extent to which a particular trading functions as well. Moreover, interviewers will
financial accounting policy choice renders accounting often ask you to discuss a particular stock or stocks
income higher or lower than actual cash income. For you follow, and give a buy or sell recommendation.

The Interview
example, if a firms depreciable assets are vulnerable In such cases, the interviewer is looking more to
to technological obsolescence and the firm uses a establish your enthusiasm for financial markets than to

very long depreciation period, recorded expenses will debate the merits of a particular company or its stock
underestimate depreciation costs. Reported income price. A good answer to a question such as Tell me
will therefore be overstated accordingly. about a stock that you follow would be to give some
brief background about the company and industry
Cash flow statement and why it interests you. You should then follow with
The statement of cash flows is another essential part a brief discussion of the current stock price, how it has
of any financial analysis. After all, even though a changed over time, what seems to be driving the price
company may be profitable, it needs cash to pay its up or down, and the relevant industry information.

Prep Guide
bills and fund its ongoing operations. Companies have Among stock pickers, this type of analysis is known
to balance their outflows (paying bills, employees, and as fundamental analysis. (The other main type of
so on) with their inflows (cash from sales of products, analysis is known as technical analysis, or charting,
collections of amounts owed to the company, and and focuses on the historical pattern of prices and
investment). The cash flow report explains how volume with the objective of discerning patterns in
cash was used and generated in each of three areas: supply and demand over a specified period of time.)
operating, financing, and investing. Operating cash When a pro does it, fundamental analysis begins
flows are those funds consumed and generated by the with the underlying factors that drive a particular
operation of the companys core business. Financing industry. It uses historical information, as well as pro

cash flows describe events such as the payment of forma or forecasted information. Thus, fundamental
dividends, the issuance of stock or bonds, stock analysis starts with a big-picture evaluation of the
repurchases, and the repayment of debt. Investing economy and proceeds to narrow its scope to a study
cash flows detail how money was spent or raised from of industry-level metastructure. A detailed analysis of
selling or buying capital. each company operating within a particular industry
follows, culminating in the creation of a predictive
Statement of retained earnings. valuation model. This company-level analysis entails

The statement of retained earnings is used mostly both an assessment of a firms financial profile as well
A Students

for analyzing the relationship between dividends and as softer issues such as management competency,
retained earnings. It shows how end-of-year retained strategic vision, and brand equity.
earnings are computed. To calculate, start with Several comments are in order with respect to
beginning-of-year retained earnings, add net income, fundamental analysis. First, it is meaningless to analyze


At a glance
Beat the Street: Investment Banking Interviews

a firm in isolation. Most bankers either analyze a firm

over time or against an industry benchmark or both. Investment
Moreover, you should only begin analyzing financial
statements after youve examined the fundamentals Banker Speak
The Interview

of the industry. For example, if you were a research

analyst covering the pharmaceutical industry, you Part of your research should involve learning to

might identify overseas sales as a key industry driver. talk the talk. Youre not expected to have mastered
In analyzing a particular pharmaceutical companys banker speak by the time you have your first interview,
income statement, youd know to account for the fact but you can separate yourself from a very large pack
that exchange rate fluctuations will affect period-to- if you become familiar with some job-related terms.
period earnings considerably. (Note: The source for some of these buzzwords is
Miriam Naficys The Fast Track, which is also full of
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other useful tips.)


Comparing Two Firms

Calculating and benchmarking individual ratios
As with most professions, investment banking has its
is a necessary, but insufficient, part of the study own patois. While you will find sprinkled throughout
of a firms financial health. It is also necessary this guide many of the buzzwords you should
to decompose (or double-click on) the ratios, become comfortable with, one bit of lingo is worth
or employ several ratios to describe a firms
financial well-being. Consider abbreviated highlighting at the outset: Calling investment bankers
financial information for two firms, ABC and XYZ, I-bankers is like calling San Francisco San Fran
both operating in the same industry. or Friscoonly the out-of-towners do it, and the
Prep Guide

locals will immediately know youre not one of their

6/26/02 9:37 a.m.
Firm ABC Firm XYZ own. Get into the habit of using the term banker.
Price Per Unit $10 $5
Beauty contest
Number of
Units Sold 1,000,000 2,000,000 The series of presentations investment banks make
to clients to make themselves more appealing than
Sales Revenue $10,000,000 $10,000,000
competitors and therefore win the deal. Think of your
Cost of Goods Sold $8,000,000 $6,000,000
efforts to land a position in investment banking as
Net Income $2,000,000 $4,000,000 your own personal beauty contest.

Net Profit Margin 20% 40%

At first blush, Firms ABC and XYZ seem to be

equally successful, each generating $10 million A form of tradable debt evidenced by a promise to
in sales revenue. However, further inspecting the pay back money owed. The issuer of a bond promises
numbers reveals two significant facts. First, Firm to pay the bondholder a specific amount of interest
XYZ sells twice as many units as Firm ABC and
at a lower price. Second, ABCs expenses are 33
(the coupon) on the original amount borrowed (the
percent higher than XYZs, pushing its net profit principal) for a specified length of time.
A Students

margin downward. To derive a robust predictive

model that can be used to value a firm and its Cash flow
stock, an analyst must understand the operating
profiles of the various competitors within an The amount of real dollars a company generates from
industry. its operating, investing, and financing activities. In
many industries, cash flow differs from reported

At a glance
income (profit) because of noncash accounting charges Junk bonds (high-yield debt)
that must be included in reported income. Therefore, Bonds backed by issuers with shaky financial
cash flow is often a better measure of a firms health. prospects. To compensate for the increased risk of
Cash flow is often equated with EBITDA (ee-bit- default (including the possibility that the issuer will

The Interview
dah)earnings before interest, taxes, depreciation, be unable to make scheduled interest or principal
and amortization. repayments), the interest rate demanded on junk debt

is relatively high.
Copy, collate, spiral binding, double-sided
Enough said. LBO
Leveraged buyout. Buying a company using
Comparables/Compsave predominantly borrowed funds, often through a
Large spreadsheets comparing the financial stats combination of debt securities and bank loans. For

The Interview
of different deals, client competitors, or even the a number of reasons, including bad press in the
investment banking capabilities of competing firms. late 1980s and subsequent changes in bank lending

As an analyst, you will spend a significant portion regulations, LBOs are now often referred to as HLTs
of your waking hours updating these and ensuring (highly leveraged transactions).
their accuracy (and dreaming about them in your
sleeping hours); as an associate, you will oversee their Model
preparation and double-check for accuracy. Comprehensive financial projections, created with
Lotus or Excel spreadsheets, that show the effect of a
Corporate finance specific transaction. You will spend a great deal of your
The group within an investment bank that provides time building, updating, and explaining these.

Prep Guide
advice to corporations on a range of financial matters,
including raising capital via debt or equity. Pitch books
The documents investment banks use to try to win
Due diligence, or due dili (di-lee) business with potential clients at beauty contests. The
Investment bankers evaluation of the financial and book highlights the banks performance, merits, and
other conditions of a company before they help the the comps and models you slaved over. This is what
company issue securities to the public. keeps you up all hours compiling, editing, copying,
collating, and binding.
Equity or stock

An ownership interest in a company, publicly or Spell-check
privately held. Swear by it from here on out. Two minutes before the
big meeting is the wrong moment to catch a typo.
Fixed income (Youll also keep a dictionary within easy reach.)
Also known as bonds. As the name indicates, the
interest rate is fixed, with a certain period of maturity. Underwriting
Investment banks purchase of a securities issue for

IPO resale to investors.

A Students

Initial public offering: Selling shares of a privately held

company to the public for the first time. Yield
The annual return on an investment, expressed as a
percentage of the original investment.


Prep Guide

The Judges Scorecard..................... 32
Acing the Interview........................ 36
Round One: First Interview........... 38
The Airplane Test............................41
Round Two and Beyond.................41
Your Final Interview....................... 44
A Few Words on the
Stress Interview.............................. 46
Your Turn to Ask the Questions..... 47
Denouement.................................. 50
The Offer....................................... 50
Dealing with the Offer....................51
Salary Negotiations.........................51
At a glance
Beat the Street: Investment Banking Interviews

The Judges mature and responsible. (Its easy to forget that

investment bankers work with enormous sums of other

Scorecard peoples money.) Finally, banks want candidates whose

personality seems a good fit for their organizationsa
The Interview

person who is ideal for Goldman Sachs may not

In this section, well tell you what the recruiters flourish at Merrill Lynch. A Lehman Brothers

in CorpFin and Sales and Trading are seeking. There employee may not do as well at JPMorgan Chase. In
are a few constants. Candidates should have strong addition, different areas of an investment bank require
quantitative skills, because the work involves a large different skills and personalities. We remind you to
number of rapid calculations. A recruiter will want think deeply about which part of investment banking
candidates who seem particularly eager to start their is right for you.
investment banking career with his or her particular
Corporate Finance
The Interview

firmif you have doubts, it will show in the interview.

Recruiters seek people who work well with others, The top CorpFin candidate should possess strong

maintain poise under pressure and arent ruffled by quantitative and analytical skills (good with numbers,
long hours. They also want candidates who seem able to draw conclusions from seemingly unrelated
facts); an understanding of the industry (quickwhat
was the biggest IPO last year?); an ability to learn
Investment Banking Recruiters quickly and work efficiently (never need things
Top Ten Pet Peeves explained twice, never miss deadlines); meticulous
Rank Pet Peeve attention to detail (its done right, done fast, and done
perfectlythe first time); and an ability to juggle
Prep Guide

Being asked personal questions (especially regarding


even the most obvious pregnancy).
multiple complex assignments simultaneously (can
manage three type A personalities who all expect their
Candidates who consult their resumes during the projects completed yesterday).
interview. (Dont you know your own background?)

Follow-up calls to confirm that the firm received Special Information for Undergraduates
3 your resume. (Recruiters sometimes get 8,000 Recruiters say a top candidate for an analyst position in
resumes a season.)
corporate finance is an economics, finance, or business
4 Emailed resumes.
Chart Source Copy major who has graduated from a top 40 school with a
minimum 3.5 GPA. The candidate has demonstrated

Creative resumes (strange paper and fonts,

attached to a fishing-reel hook).
excellence through academic awards and the ability to
juggle extracurricular leadership activities and team
Questions that have already been covered in the sports. Fluency in a second language, especially Spanish,
Japanese, or Mandarin, is an added plus.
7 Canned answers.
There are few candidates that fit this idealized
profileso take heart! In fact, whether you realize it
8 Long-winded answers. or not, you share many qualities of the top candidate,

even if your experiences and talents arent as instantly

A Students

9 Arrogance. marketable as those listed above. While you may not

have an athletic bone in your body or an economics
Undergrads who think theyll be running meetings degree, you may be committed to a different activity.
and rubbing elbows with the CEO.
Highlight it! And a liberal arts major is no cause for

aT a glaNcE
gloom: Investment banks are filled with English, who possessed the perfect combination of modesty and
history, and philosophy majors. understatement. Everyone recommended this guy.
That said, if you didnt major in economics or While he attended a school where we dont recruit, no
business, youll need to show that youre comfortable one seemed to care. This guy was just so nice and so into

and skilled working with numbers and that you can the job that everyone unanimously agreed he would sell
learn how to analyze companies and industries. If his soul to get his work done. His intelligence, ambition,

youre still in your junior year, it might be time to and humility made him an ideal analyst.
include the odd accounting or economics class in your
course load. Special Information for MBAs
Its also important to remember that getting While a large percentage of the full-time associate
hired as an undergraduate analyst is based more on classes come from the summer associate pool, there is
intangibles than any other position in the bank. still hope for those of you who elected for a different

One firm actually tried recently to find a correlation first-year summerprovided, of course, youve done
between its most successful hires and the schools they time in banking or have relevant work experience in

went to, their grades, their SAT scores, their rating on areas in which the firm specializes. The criteria for
the big, super interview day, and other quantifiable an associate include all the expectations investment
items. They found none. Use this to your advantage. banks have for undergraduates and summer associates,
People who can demonstrate an understanding and plus a total grasp of the business and the job. While
real enthusiasm for the job, attention to detail, a your undergraduate studies, GPA, GMATs, and SATs
friendly disposition, and a humble eagerness to follow matter, your work experience, the reputation of the
directions may be way ahead of their peers with four business school you attended, and your potential to
years of accounting courses under their belts. become a long-term asset to the firm are far more

One more tip: Recruiters know that an important. Of course, raw brainpower is a must, since
undergraduates experience is limited. So make theyre expecting that you can easily learn anything
them see that you are, in the words of one insider, your background left out.
reachable, teachable, and updateablethat is, full When asked what she looks for in an ideal associate
of determination and easy to get along with. If you candidate, one recruiter says: We dont look for one
can demonstrate that you can survive, thrive, and take certain thing. We look for a good record of achievement
orders in a type A environment, you wont have to in undergraduate grades, extracurriculars, and post-
worry about gaps in your background. college work experience. We pay special attention if
Anyway, no one likes a 22-year-old know-it-all. they were promoted early, worked in a Big [Five] firm,

One recruiter recalls an interview with a recent hire ranked in the top tier of an analyst class, or served in
the armed forces. Undergraduate majors are not as
> tIP important at this stage. Of course, my ideal candidate
As one insider chillingly puts it, would have a finance and accounting degree and have
Analysts are not bankers, they worked as an analyst at another firm. I love that because
are slaves to the bankers. We
then we dont have to train them. She notes that as
want to see that theyll do as
they are told. According to this a result, Its not surprising that 30 percent of the

investment banking class were former analysts.


same source, you wont be making

corporate presentations to senior Another recruiter says, My ideal candidate would
management, but you will become
best friends with the copier and
be at a top business school and would have been an
spend many a night sleeping on it. analyst at Goldman or Morgan Stanley. He or she
would have language skills, which are now more


At a glance
Beat the Street: Investment Banking Interviews

important than ever. They would also have done outset, your personality is what really counts. If you
something different for their MBA summer, which come across as a confident (but not cocky), thick-
brings something new to the table. skinned, good-natured person who learns quickly
and can work on a team, youre a strong candidate.
The Interview

Sales and Trading Liberal arts majors are rarely hired unless they have
The hard and soft criteria used to assess people for sales prior S&T intern experience.

and trading jobs are different from those in corporate

finance. Sales and trading interviews are more heavily Special Information for MBAs
skewed toward assessing people skills, particularly Sales and trading candidates have to pass a different
those related to negotiation, relationship-building, and muster from whatever their pals are undergoing
persuasion. If youre not sure why, take a stroll around in CorpFin. Recruiters want to see that your past
a trading floor when its busy. If you like the hubbub experiences and unwavering passion for the markets
The Interview

and think youre tough enough to thrive there, send make you a logical choice for S&T. They also
in your job application. If not, its time to consider typically require that second-year MBA candidates

alternatives. Remember youll be risking millions of have previous experience on the Street. Asked to
dollars every day and wont have the luxury of slipping describe what she looks for in an ideal candidate, a
up much. Great results count most. A brand-name bulge-bracket recruiter says, The person would have
school and high GPA wont rescue you from mistakes. graduated from a top-tier undergraduate and graduate
The various desks willing to hire young talent are program, having demonstrated excellence both
looking for market smarts. (Lest you forget, while youre academically and in some activity that required them
learning, youre not earning. Playing teacher to a crop to be a team player. Previous Wall Street experience of
of fresh recruits is a much more direct hit on the desks course is ideal; however, consulting experience is also
Prep Guide

bottom line than anywhere in CorpFin.) Intelligence great. Quantitative skills are a must for anyone in any
is measured by your understanding of the markets and of the sales and trading positions.
specific products, as well as your quantitative skills The S&T interviewing process has fewer instant
and ability to take orders faster than the fastest online and obvious faux pas. Where you went to school is
system. While investment bankers frequently schmooze generally much less important than a profound, if not
with clients, traders dont have the time. From the intuitive, understanding of the business. The bottom
get-go, you must rev yourself into overdrive and start line is money. Indeed, if youre asked, Why do you
talking, moving, listening, and networking faster than want to be a trader? and you answer, I want to give
you ever thought imaginable. The good news? Next it my all and make a ton of money, chances are your

year, youll be trading and selling with the prosand interviewer would just shrug and move on to the next
mercilessly managing the new kids. question. (Over in investment-banking land, of course,
such a response would sabotage your chances.) If
Special Information for Undergraduates youre a potentially quick moneymaker and you seem
Students with high GPAs who have majored in tough enough to survive, then youre inat least for
economics or finance generally fill entry-level sales a while, until you do something unpardonably stupid
and trading positions. Understanding economics is a or you just cost too much, and then youre out. Cocky

prerequisite to surviving the first three months. One arrogance is not appreciated. Insiders confess they hate
A Students

source reveals that she generally looks for resumes when the new MBAs start interviewing on the floor.
that show a willingness to take risks, sales experience, One says with a sigh, You can just tell that they think
and nontraditional choices. Since most college they are going to walk in and start trading. Little do
graduates know very little about the markets at the they know that theyll be responsible for getting coffee

At a glance
for someone younger and less educatedand that brilliant success, but consistent diligence and
generally doesnt fly too well. Titles mean very little competence
in S&T unless you are really senior. Basically, youre
either a peon or a moneymaker. Type A personalityyoure meticulous.

The Interview
INSIDER SCOOP Good business senseeven without the

Past successes mean very little to us. You experience, the instincts should be there
must be inwardly focused and driven, but if you
cant thrive in an aggressive team atmosphere, Good grades in B-school (Your undergraduate
youre history. Thats why we hire so many grades dont matter too much unless you got Ds
athletes. in finance or accounting. Otherwise, admission
to a top business school will have bleached the

The Interview
A final tip: When you interview on the floor, writing on the slate.)
make sure you have a clear understanding of what

you want to do there. If you want to work with Special Information for Undergraduates
derivatives, have a reason and know the product. Dont Few firms offer formal, pre-graduation summer analyst
pretend you know more than you do. Traders and programs for undergraduates. Consequently, recruiters
salespeople revel in foolish displays of ignorance. You are much less concerned about Wall Streetspecific
havent experienced humiliation, complete and utter experience in analyst candidates than in associate
ignominy, until a trader decides to dress you down in hopefuls. At the same time, having a summer analyst
public for saying something really dumb. program under your belt enhances your marketability.
One added note: Some firms have summer programs

Prep Guide
Summer Internships

targeting minority students. They were designed to help
Banks require the same levels of commitment and generate more minority job candidates in an industry
enthusiasm from their summer hires as from their that has struggled to attract Latinos and blacks.
full-time recruits. Even though recruiters say that
they dont expect first-year MBAs to know everything,
MBA interns say you should have some idea what you
want to do. Says one MBA: Its a competitive pool Most Common Interview Gaffes
out there, so youd better be able to express why youre
interested in, say, equity as opposed to fixed income, Heavy cologne

and why you are suited to the job. Poor eye contact
Heres what recruiters say they look for when
interviewing summer interns: Casual language (greeting an interviewer with Hey, whats up?)

Sloppy appearance
Excellence in some fieldbe it athletics, the
military, short-story writing, professional music Cold or clammy hands

engagements Answering a different question from the one you were asked
A Students

Dedicationwhich can be translated into passion Nervous chatterdont be afraid of a brief moment of silence

for proofreading pitch books True confessions (keep your political views and private life
privateand dont ask your interviewer about his or hers)
A good, steady track recordnot just one


At a glance
Beat the Street: Investment Banking Interviews

Special Information for MBAs Picking Your Time

It used to be easy and acceptable for MBA students Can you position yourself to stay in the recruiters
to explore one career option in the summer after minds on the basis of the time of day you meet with
their first year, then upon graduation, take a job in a them? Psychological studies have explored in some
The Interview

different field. But that doesnt apply to investment depth when and how to catch your interviewers most
banking. Indeed, banks draw 80 to 90 percent of positive biorhythms. Most of this research says that

their associates from summer interns. They see the recruiter typically forgets the first interview of
internships as a way to judge if someone is a good the day and is exhausted by the time he is onto the
fit. So be forewarned: If you want to try something last interview. Recruiters are also not at their best
different and then move to Wall Street upon immediately after lunch. That said, its best to focus on
graduation, you may have trouble finding a job. But your needs. Sign up for a time when you are typically
MBA recruiters dont require previous Wall Street most awake and coherent. Your own energy can often
The Interview

experience from first-years seeking summer associate be the most important aspect of the meeting.

What to Wear
Research If you dont have one already, go out and buy yourself
Junior research positions filled typically by recent an interview suitone that fits properly and looks
undergraduates involve a great deal of modeling. sober but not funereal. Leave the suspenders at home.
These are not positions for liberal arts majors but Dont forget to shine your shoes. Women shouldnt wear
rather for economics and business majors and pantsuits but rather skirts or dresses. Hemlines should
others comfortable with quantitative analysis be no higher than the width of a dollar bill above your
and and possessing an interest in learning about knees. If its a straight, narrow skirt, extend this rule to
Prep Guide

companies and industries. Youll need excellent sitting down. Sound unbearably conservative? Get past
writing skills, well-honed editing abilities, and the it. Some recruiters actually revel in the idea that invest-
ability to sell via numbers the companies your firm ment banking is one of the last bastions of conformity.
is underwriting. Its all about fitting into a culture. As one interviewer
puts it, We dont want anyone whos too creative; we
want everyone to dress the same to keep up our image.

Acing the Its better to blend in than stand out. He remembers

with a shudder one candidate who pranced into his

Interview office unshaven: My thought was that if he doesnt have


the time or the respect to shave, hes not interested.

Now that you have a handle on the various INSIDER SCOOP

departments in the bank and on what the recruiters Remember, getting hired is tough. We are
will be seeking, its time for a mad dash through the looking for ways to cut people. If it comes down
interview process. If youre serious about entering this to two people with the same credentials and
field, chances are that youll have a series of back-to- personality, the one dressed like a banker will

back interviews with many industry powerhouses. In inevitably get the job.
A Students

this section, well tell you how the process will unfold,
and provide recommendations on how to succeed at One more tip: Dont try to impress people with big-
each stage of the interview process. We start with a few label brands and suits and accessories that are too loud.
general tips. Gray or blue will do. Leave the extravagant jewelry at

At a glance
home. On the other hand, dont be shy about wearing Thank-You Notes
your best watch. Well-made, expensive watches are a Thank-you notes are a nice personal touch and may
quiet power symbol. If youre in doubt about what to help your cause. They show thoughtfulness, good
wear, seek advice from a career counselor or coach, or manners, and attentiveness to small details. Keep the

The Interview
visit the firm and see what people there are wearing. Also, notes short and ensure they dont have any typos or
you should carry a leather-bound notebook complete other mistakes. (Check out the WetFeet Insider Guide

with pen slot (and pen), a short writing sample, and of Killer Cover Letters and Resumes! for more information
course several extra copies of your resume. on crafting effective thank-you notes.)

Body Language Dos and Donts

Dont Do
Stare your interviewer down. Greet with a smile and a firm handshake.

The Interview
Dont Do
Lean back in a chair or cross your legs. Sit down only after your interviewer does.

Dont Do
Fidget with pens or any other stray accessories you Sit up straight and look alert.
might have in your possession.

Dont Do

Prep Guide
Make dramatic hand gestures to reinforce your point. Make steady eye contact with your interviewer,
especially when youre listening.

Dont Do
Slouch. Lean forward when answering a difficult question (it
signals that youre interested and not intimidated).

Dont Do

Smile the whole time. It may be interpreted as Smile every so often. Not too much and never forced.
nervousness or, worse yet, emptiness. One genuine smile is always worth waiting for.

Dont Do
Interrupt or look like you want to interrupt. Bite your Exude calm. Keep your voice low and your hands in
nails or fix your hair. your lap.
A Students

Dont Do
Take off your shoes, jacket, or any other piece of Wear clothes and shoes that fit you properly.


At a glance
Beat the Street: Investment Banking Interviews

Round which, with a bit of earnest explanation, demonstrate

your dedication to team and ethics.

One: First The interviewer will probably begin the

conversation with some idle chitchat. Many recruiters

The Interview

admit that they hate to call these meetings interviews,

for the word connotes a canned question-and-

answer exchange. They prefer to think of these as

Welcome to the career center (which might end a conversation, so you should, too. Monosyllabic
up being a hotel room). You have an appointment answers, however polite, will only sound curt and
for 10:30 a.m. and the 10 a.m. candidate is taking stiff. At the same time, while you can chuckle at your
up your precious time. No need to raise your anxiety interviewers jokes, this is not an invitation to assume
level any higher than it is already: Your time will a casual, unprofessional style. Instead, listen carefully
The Interview

come. The interviewer, who may be a human resources and take advantage of moments when you can interject
professional, a junior associate, or a mid-level banker, (not interrupt) and conversationally sell yourself.

ushers out your predecessor, shuts the door to make Investment banking recruiters tend to advocate
some quick notes, and then invites you in. behavioral interviewing, the idea being that the best
This is the bell for round one. Whether you find predictor of your future actions is what youve done
yourself facing one or two interviewers, its time to in the past. If youre an undergraduate, questions
be charming and intelligent. Questions are usually will focus on your school (and why you chose it), the
straightforward, veering into the technical if you courses you took (again, be prepared to explain why
appear to know something about the job already. The you took them and their link to investment banking),
recruiter, who is often an alumnus, will try to get a extracurricular activities, summer employment, and
Prep Guide

sense of your background, what youre like as a person, special accomplishments. Recruiters are looking
and how capable you are. for enthusiastic, academically capable students who
know how to work hard and have demonstrated this
INSIDER SCOOP with a full-throttle schedule of activities. At the same
Once we assess that they have the raw brain time, you also have to convey to them that you know
power, were happy. We can easily train them. the difference between a managing director and an
analystthough the more substantive questions
The interview is your chance to focus on your pertaining to your role wont emerge until later rounds.
achievements rather than that low GMAT score or the

second-semester C in accounting (although you may A Few Words on Humility

well be asked to explain these). Its also your chance An excess of modesty wont get you the jobdont be
to tell them what they want to hear. Presumably you shy about touting your accomplishments on your resume
paid careful attention to what they said they care about or in your interviews. For example, as an associate, you
most in an initial campus information session. We dont will likely be responsible for managing a team of analysts
advise you to parrot their exact words, but a judiciously as well as maintaining client relationships, so if youve
paraphrased regurgitation will serve you well. If Bank had any relevant managerial experience at all (babysitting

X asserted back in September that teamwork and doing three kids for ten days while their parents were on
A Students

right by the customer matter more than net income vacation qualifies), dont hold back.
and Institutional Investor research ratings combined, At the same time, if you have been taking credit
these are what matter to you, too. You can even point for everything you have ever lent a hand to, give it
to several seemingly irrelevant items on your resume up now. Demonstrate that you are committed to that

At a glance
future and know when and how to metamorphose way through college, be sure to highlight it.
gracefully from leader into team player. Regardless In addition, talk about your experiences on a sports
of how much time you agonized over the sand castle team or in a group to which you dedicated a great deal
after everyone else went swimming, you must be of time. The school newspaper, chorus, and debating

The Interview
eager and willing to present the finished product as society are all just as valid team credits as a lacrosse
a group effort. Equally important, restraining your team, but youre going to have to work a little harder

humility does not mean denying your fallibility. to explain why. Merely listing your accomplishments
Indeed, addressing a mistake and discussing what you doesnt work here. You have to use them to illustrate
learned and how you grew as a result of the experience what a willing and capable person you are, your
demonstrates maturity and self-confidencetwo traits countless interests, and your drive to succeed in
investment banks seek in new recruits. anything to which you put your young mind. Provide
a few examples showing that youre quantitatively
Special Information for

The Interview
savvy (especially if you are a liberal arts major) as well
Undergraduates as qualitatively aware (especially if you never wrote a

Package and present your responses as though youre seriously analytical paper in your four years in college).
interviewing for a job as the firms English butler. If And never forget that your body language in this
you can convince your interviewers that all you want round is speaking as loudly as your words. If you say
in life is to work 80 hours a week, do what you are youre interested in the job and that you understand
told and do it perfectly, be a part of their firm, and stressful time management better than most of your
learn a lot, then youll help your cause. Your job in this classmates, make sure your nonverbal cues support
process is easier than that of MBA hopefuls in that you these statements. In other words: Maintain eye
really only have to convince these folks that you are contact. Dont fidget. Sit comfortably but straight.

Prep Guide
readily trainable and would be good to have around
for the next two to three years. Theyre looking for a Recruiters FAQ
smart, diligent worker, not the next CFO. When we asked recruiters to list some other frequently
As an analyst hopeful, youll probably also be asked asked questions, the list looked something like this:
how you arrived at the decision to pursue investment
banking. Have a thoughtful response prepared and What makes a good salesperson?
make sure your interviewer understands: Its not just
investment banking, its this particular firm thats the What makes a good product?
compelling draw. One recruiter always asks candidates

to explain an important choice they made and how it Pitch me a stock.
affected them. In her considerable experience, A true
sign of maturity is an ability to analyze yourself and the Ask me a good trading question.
decisions you have made. Previous work experience is
important, and a job that required fairly rigorous time Why are you interested in sales and trading?
management tells your interviewers you have the stamina
and ability to successfully juggle your responsibilities. Explain your role in the such-and-such job listed

Focus on the skills involved, not the prestige of the on your resume.
A Students

jobits not the job itself that matters, its what you
learned from it. Short-order cooks, for example, know Tell me about your biggest failure. [One recruiter
how to handle stress and make a seemingly endless admits if a person cant talk about failure, or if he or
stream of either/or decisions. Also, if you worked your she puts too quick and rosy a spin on a very small


At a glance
Beat the Street: Investment Banking Interviews

shortcoming, thats a red flag. In this business, you the brainteasers, Its more important to demonstrate
cant let your ego get in the way and you have to be knowledge of the process.
able to admit when youve screwed up.]
The Interview

How would you feel about selling a stock that We arent here to trip you up. Do some research,
you were ethically opposed to or didnt believe in? be prepared to answer questions about the

Okay, now sell me that stock. company, and youll be okay.

Special Information for MBAs The recruiter also encourages researching the firm
MBAs can expect two questions to carry the at which youd like to workeven on the day of
conversational exchange: Tell me about yourself and the interview. Events can occur quickly. If the firm
Why are you interested in investment banking? In announces a major deal or merger on the morning
The Interview

this first round, recruiters are testing to see whether of your interview, you should know it. One guy
you have the smarts to do the job and whether obviously looked up our company on the Internet two

investment banking is really your long-term goal. months ago and didnt follow up, so he had no idea of
Youre not being hired to build models for two or an important recent development, says one insider.
three years: The stakes are higher here. Remember that This recruiter advises candidates to know what
your past experiences dont necessarily determine your differentiates each firm from the next.
future, but you should at the very least be able to link Candidates for sales and trading will go through
the two. Think of it as a game of connect-the-dots. similar first-round interview questions. Once again,
Look at your resume and try to create a splendidly its all about Why sales and trading? and Why
logical progression from schools to previous jobs to you? Keep in mind what weve discussed before: Its a
Prep Guide

outside interests to investment banking. Youre allowed bigger investment for traders to hire you because your
one anomalyone dot that doesnt connectbut the costs come out of their pockets. Also, in training you,
rest should be excised. Its even better if you can show theyre grooming a future competitor. While investment
that your focus extends beyond investment banking to bankers are looking for diligent, likable underlings
a particular industry or functionsales, M&A, or the who will follow directions and stay up all night, every
oil and gas industry, for example. night, traders need thick-skinned fireballs who have the
This is also the interview in which theyre likely to potential to bring in the money as soon as possible. A
ask you to estimate the number of convenience stores high level of drive in these candidates is critical.
in Manhattan or the number of golf balls that might Within S&T, it is important to know what you want

fit in the room. You dont need to come up with the to do and why. Fixed income is very different from
correct number; rather, you have to display masterful equity; ditto sales and trading. If you say you are well
deductive reasoning. As a formality, youll also probably suited for a variety of positions, first youll be laughed at,
be asked for your GPA, SAT, and GMAT scores. Rattle then youll be dinged. One sales and trading recruiter we
them offaccurately. Remember, theres a good chance spoke to confides, Today I interviewed an undergraduate
that your record is in one of their folders and that they whom I would classify as a disaster. I asked him, Why
memorized it before you walked in the room. do you want to work on Wall Street? He said he was

One MBA recruiter on the CorpFin side says interested in fixed income. Well, I really dont think this
A Students

that, in addition, You need to be prepared to guy knew what fixed income was. He started to say that
value a company in a practical way, not just from a every day is exciting. The recruiter pauses and laughs.
textbook, like you learned in business school. (See Little did he know that often there are days when you go
the earlier Review section.) He says that, as with up to the trading floor and the traders are asleep at their

At a glance
desks because things are so slow. I think he just read Liars fact that he has to pass the plane test.
Poker and romanticized the whole thing. Perhaps he has offered a damp, limp handshake and
failed to look the recruiter in the eyes upon entering the
The same, but different interview room. He sits before the recruiter has taken

The Interview
MBA associates can come from surprisingly diverse her seat and slouches, refuses to make consistent eye
professional and personal backgrounds. The one thing contact, and yawns frequently. His suit is unpressed and

they seem to share is an unyielding desire to work for his shoes are scuffed. He is robotic about discussing his
a particular investment bank. That and a laundry list resume. When the recruiter asks how business school
of accomplishments, each of which required drive, peers would describe him, he says as a smart leader,
intelligence, and a commitment to excellence. We without a trace of humility or any details to back up his
asked recruiters to name some of the more unusual comment. He doesnt have questions about the bank
backgrounds they have encountered. With the caveat and leaves without an appropriately cordial parting or a

The Interview
that investment banking associates should always thank you to the interviewer.
have some previous experience in finance or a related Some of these mistakes may seem obvious. But

industry, their list included a pro baseball player, otherwise good candidates make these and others
a ballerina, an armed services officer, a buyer for a every year. They behave boorishly, look disheveled, and
well-known fashion designer, a concert pianist, a PhD appear unprepared. They mistakenly believe that the
mathematician, a physicist, a pharmaceutical sales strength of their resumes will carry them through and
representative, and an Olympic athlete. havent taken the time to consider seriously how their
appearance and actions may weigh against them.
If you have doubts about how to act in an interview,

The dont hesitate to do some research on the topic, or even

Prep Guide
speak with a career coach or counselor. Good coaches

Airplane Test and counselors can provide a ready list of dos and donts.
One additional point: a number of investment
banks conduct their first interviews by phone. Phone
Every firm has a different term for the Could I interviews require every bit as much preparation as
Get Along with This Person? test. Some call it the a face-to-face meeting. Have your list of questions
plane test. Interviewers ask themselves, How would easily accessible. Youll want to be sure youre in a
I feel sitting on an airplane or being delayed for hours quiet roomno traffic noise or dogs barking in the
in an airport with this person? Would it be okay? background. If possible, avoid phones with call-waiting.

Better than okay? Or insufferable?
Take, for example, Ralph. On paper Ralph is the
perfect investment banking candidate: an Ivy Leaguer
who worked as an analyst at another blue-chip Round Two
investment bank prior to his acceptance into a top-tier
MBA program. Ralph has been invited to interview
with five of the bulge-bracket firms. His resume
and Beyond
Unlike Reject Ralph, youve made it. You did

screams, Pick me! However, in interview after

A Students

interview, Ralph doesnt make the initial cut. Why? everything right (or at least nothing egregiously
Its not because he isnt prepared; in fact, Ralph knows wrong). Now youre ready for Round Two. Most
a lot about the business and has educated answers to banks invite recruits to their New York headquarters
every question. However, he never took seriously the for a grueling routine of socializing and back-to-back


At a glance
Beat the Street: Investment Banking Interviews

interviews. The questions in this round will be more The Evening Before
focused. Youll have to know more detail about the You stayed up all last night finishing your term paper
firm and your chosen line of work, and repeat some of or wrapping up a case study, skipped lunch, and
the information related to your background. rushed to the airport to make your flight to New York,
The Interview

If youre called back for a second round of only to arrive in the Big Apple with one hour to spare.
interviews, consider calling your first-round interviewer Anxiously you check into your midtown hotel and

for suggestions on how you might improve your scamper off to a firms two-hour cocktail party. Dinner
performance. Keep your questions short and to the with fellow alumni follows this event. Remember that
point. Some candidates have been surprised by calls these people will be your strongest supporters if you
from the first-round interviewer, congratulating them impress them, because at most banks there is a lively
on reaching the next round and offering unsolicited internal competition among the folks from different
advice. In one such case, the interviewer told the schools. Also remember that whenever there are
The Interview

candidate that while he had great potential, he was representatives of the bank present, you need to think
too aggressive during the first round. Another student, and act like youre selling yourself.

considered very qualified but unpolished, received Follow a few simple guidelines to ensure youre in
coaching on body language and appearance. But no prime condition the moment you set foot in the lobby
matter what happens with your first interviewer, do of your prospective employer. First, before you leave
not grill the person who calls to set up your second the hotel, eat and drink something substantial enough
interview on your strengths and weaknesses. to keep your blood sugar at an appropriate level. When
If you are interviewing for a position in sales and blood sugar sinks, you lose energy. That will show
trading, you will most likely never receive a courtesy in your interactions. When you enter the room, you
coaching call before your final interview. Traders dont have between one and two hours to meet, greet, and
Prep Guide

have time and, frankly, dont really care if youre shiny impress people. Drink moderately. Dont forget that
and polished. (1) social events are an important part of the hiring
process, and (2) tomorrow morning you have a full
PS: The Walls Have Ears day of interviews.
The following true story illustrates a very simple rule Recruiters say that behavior at the cocktail parties
we cant emphasize enough: Do not talk about your and dinners is often their only way to assess how a
interview with other candidates, especially in the future employee would act with a client. And while its
bathroom or the elevator. One morning an investment important to use this opportunity to introduce yourself
banking recruiter, clad in casual Friday attire, was to the senior people in the department you most want to

taking the elevator up to her office for her first work in, you also need to interact with your competition
interview of the day. John and Mike, two prospective for the job, plus the present analysts and associates.
MBA candidates, were also in the elevator. Mike asked Recruiters pay a lot of attention to group dynamics. You
John with which part of the bank he was interviewing. want them to see that you play well with others.
Looking around the elevator and seeing only a few In conversations, play things conservatively. No one
other people, none of whom looked like bankers, John likes a flirt or a suck-up. If youre gregarious by nature,
replied, Investment banking, but Im actually not you might want to listen and observe others more than

interested in this firm. Im just doing it for practice. usual. It is much more important to attend politely to
A Students

Ten minutes later, the poor man turned out to be the what others are saying than to dominate and dazzle the
recruiters first appointment of the day. She greeted room with your wit and wisdom. After all, few clients
him politely and told him there would be no interview. would abide by a banker who refused to allow them to
get a word in edgewise.

At a glance
Good table manners will reflect favorably on your Following your meal, at some point, jot down the
candidacy, too. Remember to put your napkin in your name of every person you can remember meeting
lap, take small bites, chew with your mouth closed, and something about who they are and what part of
and wait for others to be served before digging in. the bank they work in. Your cheat sheet can be of

The Interview
Include people on your right and left in conversation. immeasurable help. Before you go to bed, lay out your
Refrain from heavy discussions about politics and wardrobe for the next days activity. Set your alarm

other potentially sensitive subjects. Remember to say clock, then (just to be on the safe side) schedule a
thank you to waiters and others that serve you. wake-up call for shortly after the alarm sounds.

Social GatheringsFrom Cocktails to Lunch

Dont Do
Order messy, hard-to-eat food. Eat a nourishing snack before cocktail hour.

The Interview
Dont Do
Be a wallflower Seek out and introduce yourself to important players.

Dont Do
Eat fast or display bad table manners. Take small bites and use the cocktail napkins

Dont Do

Prep Guide
Tell dirty jokes. Err on the side of being excessively polite.

Dont Do
Be informal. Respect the competition. With any luck, they will
soon be your colleagues.

Dont Do

Let anyone see you writing their names down in a Pay close attention to the name tags. Remember as
notebook. (But by all means do it later.) many names as you can.

Dont Do
Drink too much. Be yourself.
A Students


At a glance
Beat the Street: Investment Banking Interviews

Your Final a particular desk than others competing for the same
slot? More important, do they like you? You need to be

Interview more polished and focused than the other candidates,

and have a clearer understanding of the business and
The Interview

the job. You also need to convey why you want to

Good morning. Youre up in time and ready work for only this firm.

for action. You survived the previous nights social We are all reassured by others who seem like
test and now its time to come face-to-face with us. We are even more reassured if this person with
about six recruiters and bankers. Now is the time to whom we feel so comfortable validates our choice of
take a few deep breaths and take care of any small, employment. So be a chameleon. Take cues from your
last-minute chores. interviewer. And make sure the subtext reads: If you
like working here, I would obviously love working
The Interview

here. That said, you shouldnt change who you are.

Before you meet with interviewers, you will probably Youll come off as stiff and forced.

gather for breakfast with your fellow candidates and Every corporate body has its own way of doing
members of the firm in either a conference room or the business. One firm may like people who take initiative
corporate dining room. Remember: As soon as you enter and are creative. Another may primarily assess your long-
the breakfast room, your interview has begun. Recruiters term potential as a banker: Are you a team player and a
say that they observe how candidates interact with their leader all wrapped into one? Can you feel the moment
peers. Most say they are impressed with students who when you must push others aside and grab the reins? Yet
take initiative to greet the competition with a handshake another may want you to simply conform and follow
and an introduction. Youll receive an interview schedule, directions. Do your research and know the preferences
Prep Guide

which will list the senior-level bankers youll be talking of the firm youre interviewing for. One former analyst
to and the groups in which they work. recalls receiving an offer from one bank but not from a
Consult the short list of points that youd like to competitor. She admitted that this was understandable,
cover. If you had a nice chat with Mary Merger and since her personality was better suited to that firm.
Andy Acquisition at dinner, no harm in mentioning
this when you go in to talk with their M&A bosses. Welcome to the Show
Think about the topics they brought up and seemed Questions wont vary much from those you were asked
interested in. Think about how they presented in the first round; there will just be more of them. Now,
themselves and the firm. You were given a wealth of more than ever, you need to make everything in your

corporate and cultural information last nightuse background relate to investment bankingand to your
it. Interviews will last anywhere from 30 minutes to interviewer and his firm. If youre interviewing for a
one hour. If it makes you tired just thinking about it, summer associate position, its particularly important
wait until you have talked about yourself for five hours to make a logical connection between what you did
straight. This experience has been known to exhaust before business school and what you want to do
some of the biggest egos out there. both this summer and after graduation. Prepare as if
recruiters expect you to know. Choose an area and stick
Pre-Game Warm-ups

to it. If you are interviewing with sales and trading, do

A Students

It is time to distinguish yourself from your peers. not mention that you are also considering corporate
While round one was primarily about your ability to finance. Be specific about what you want to do in that
do the job, round two is more about assessing whether area. S&T recruiters wont look favorably at candidates
you mesh with this firm. Why would you be better at who cant be intelligent about equity versus fixed

At a glance
Interview prep exercise
Study your resume. What have you done or studied that coincides with what recruiters are seeking? Find
examples in which you demonstrated leadership, dedication, success under pressure, an ability to juggle priorities,
quantitative analytical ability, and teamwork. You also need to emphasize whatever the firm was plugging hardest
at the first campus information session.

The Interview


The Interview

In one minute, maybe two, try to logically link the experiences on your resume to one another and then to your
future in investment banking. Rather than list the skills, demonstrate them through examples. Why would you be
a successful analyst/associate/trader/salesperson? How do you exemplify how this firm already sees itself? (In
other words, if the firm touts itself as global, how can you appear to be international?)

Prep Guide

Ask yourself who youre trying to convince with this pitch. (If it is you, better reevaluate your career choice.)
Knowing your audience is key. Pitch your candidacy to the person whos in charge.


A Students


At a glance
Beat the Street: Investment Banking Interviews

income or explain why they favor one over the other. politely suggest another time for the interview. The
Each banker with whom you meet will have his or subtext of this action is clear: If you dont have time
her own interviewing style. Some of the guys wanted to for me now, I would be happy to speak with you on
push me to my limit and make me uncomfortable, while another occasion.
The Interview

others just wanted to get to know me, said one hire. Another stress tactic: a two-on-one session in
Consider yourself lucky if half the people you which the bankers play good cop/bad cop. In one such

meet want to engage you in a lets-get-acquainted interview, a candidate became so infuriated by the bad
chat and limit their questions to why you want to be cops harsh interrogation and obvious scorn that she
an investment banker and how your background is threw caution to the wind and shot some of that hostility
well-suited for a job in the industry. But be prepared right back at him. Convinced shed nixed any chance of
to prove your quantitative intelligence and survival ever getting a job on Wall Street, she arrived home to a
instincts. A warning about answering numerical, phone call from none other than Mr. Bad Cop, inviting
The Interview

logic-based questions: Its best to admit that you do her back for a second round of interviews the following
not know an answer, and feel stupid for a split second, morning. He made a point of congratulating her on her

than to pretend and get caught. If an interviewer assertiveness and her ability to handle pressure.
senses that youre pretending to understand something, For their part, our banking sources insist that they
he or she will likely push you until you break. An do not conduct stress interviews. But most recent
insider who has had countless investment-banking interviewees would disagree. One recruiter offers a
interviews says, When you dont know, say you dont rationalization for this interpretive divergence: Just
know. Just remember you never want to say it twice. remember: its all perception, says one banker.
Let the interviewer control whats going on here. While no one can prepare for every wild pitch, make
You need to appear competent, but not in charge. sure you know whats expected of you in general terms.
Prep Guide

There will always be the random banker who just wants

to make you uncomfortable. Sometimes you can best

A Few Words these types, but more often, you cant. Just take a few
deep breaths and roll with the punches. More often than

on the Stress not, all thats being tested in a stress interview is your
ability to keep your wits about you. For your edification

Interview and amusement, here are some of our favorite war stories:
A former analyst recalls an interview in which a
woman, not much older than she, looked at her

Stress interviews are an offbeat way to see without so much as a smile and said, Okay, tell
how candidates react to unusual circumstances under me a joke. Entertain me for five minutes and then
pressure. Our advice: Expect the unexpected. well see if I want to stay and learn more about
In one type of stress interview, a recruiter might you. (Note: Under no circumstances is this an
introduce himself, start reading a newspaper and ignore invitation to serve up an off-color joke.)
a job candidate for minutes. The baffled candidate
might sit silently, fearful that she would upset the Another candidate cites a banker who wouldnt

interviewer, or grow angry and lose her temper. Under- shut up for the majority of the interview; out
A Students

or overreacting could sabotage a candidacy. Banks want of politeness, our source thought it best not to
neither a wallflower lacking the confidence to speak up interject. At the end of the session, the banker
for himself nor someone whos rude and overaggressive. criticized him for his lack of assertiveness.
After a brief interval, a calm, collected job seeker might

At a glance
INSIDER SCOOP the interview and sum up his candidacy. He suggests:
In my interview, the guy focused on the fact Thanks. I think youve probably answered all my
that I had played in a band in college. Of course important questions, but I would like to leave you
I had listed that I played bass guitar, but he with three things to consider about my candidacy.

The Interview
wanted to see if I had more talents. He then Recruiters say that candidates can lose points by ask-
proceeded to conference in four other guys and ing a meaningless questionone whose purpose isnt to

then made me sing a few lines of a song. Im elucidate an answer, but to demonstrate their cleverness
tone deaf, but I did it. Granted, I was extremely or their familiarity with The Wall Street Journal. But if you
embarrassed, but for some reason they thought have a good question, ask away, and include qualifiers
it was funny and seemed pleased. Hows that for that show how thoroughly youve researched the firm. For
induced stress? example: I know youve moved a lot of people around in
the past year, both here and in your West Coast branches,

The Interview
Regardless of the questions asked and the tactics and there also appear to have been some fairly significant
employed by an interviewer, keep in mind you are being management changes at the senior executive levels. But

assessed on how you handle a situation. Stay cool and Im still curious as to why your rating dropped 24 points
be prepared for anything. One undergraduate candidate in Fortunes 100 Best Companies to Work For. These fac-
arose on interview morning feeling queasy. In an effort tors explain some, but perhaps not all, of what happened.
to calm his insides, he ate a small breakfast. The doors Would you mind talking about this a bit more?
opened and before our candidate could greet his peers Even if they hate answering this question, your
and recruiters, most of whom were standing less than interviewers will give you top marks for having done
ten feet away, he threw up. Instant gong, right? Actually, your homeworkand also for giving them some ways
he handled the situation so well that, after returning out they might not have considered. How attentively

Prep Guide
for another interview, he received and accepted an you listen to their response also makes a difference.
offerand the affectionate office nickname Chuck. Even if they parrot back the easy out you just gave
them, save your skepticism for the moment you have
an offer in hand. Nod your head, lean forward slightly

Your Turn and look interested. And dont be afraid to let them off
the hook if they start to squirm. Interviewers dont like

to Ask the answering tough questions any more than you do.


My last interviewer stood up and thanked me for
coming. I followed suit and was relieved that it
The interview is drawing to a close. Youre almost was over. I was confident that I was well on my
there. The recruiter or banker has asked if you have way to an offer when all of a sudden, two other
any questions or feel there is something of importance bankers charged into the room. Have a seat, one
that you havent addressed. This is not a cue to sit of them ordered. This interview is far from over.
back and relax. Insiders say that this is the point where For the next 45 minutes, these two guys grilled

many strong candidates talk their way into a rejection me like there was no tomorrow. After I received
A Students

letter. First, dont feel obligated to ask a question. If an offer, I learned that as a candidate gets closer
it comes out sounding canned, youll be dinged even to the brass ring, the firm will sometimes lay it
as you speak. One MBA student who received several on thick just to see how he or she reacts to the
offers explained that he used the question time to close unexpected pressure.


At a glance
Beat the Street: Investment Banking Interviews

Last-Minute Comebacks INSIDER SCOOP

and Surprises One guy was so lackluster in the first two
What happens if you get off to a bad start or are minutes, I thought, Oh, yuck. But then he got it
having an off day? going, and by the end I really thought hed be a
The Interview

Its hard to recover from an awkward start. An great candidate. But this is pretty rare.
interview is so short, and the interviewers are so seasoned,

that they usually form an impression of a candidate Of course, a good beginning isnt enough: You
within the first few minutes. The best candidates tend can sabotage it with a poor middle and end. Some
to be consistent from the minute they step in my office candidates get overconfident, too comfortable and say
to the minute they leave, says one recruiter. A comeback the wrong thing. Never assume that at any point in the
is possible, but it is likely to occur early on rather than interview youre home free.
three-quarters of the way through the interview.
The Interview

secretaries and receptionists

Some candidates fail to show respect to receptionists and other administrative staff. Or theyve said things in
their presence that reflected poor judgement. These are serious mistakes. Treat these people with the same
professional courtesy that you do the most senior bankers. Remember many of them have been with the firm for
years. They have their supervisors ears and can sink your candidacy with a few well-placed words. One banker
spoke of a top candidate who spoke rudely to a receptionist and was promptly rejected.

In Summation
Prep Guide

If you had to leave your interviewer with three thoughts about you, what would they be? Fill in answers to the
following questions to help you refine your pitch. What distinguishes you from your peers?


A Students

At a glance
secretaries and receptionists (continued)
Why would you be a particularly good candidate for this job?

The Interview


The Interview

How could you add value to your team?

Prep Guide

How do your past accomplishments show that you can do the job?


A Students

Your responses to these questions provide an interviewer with four reasons the bank should hire you. Choose the
three strongest. Try not to forget them next time.


At a glance
Beat the Street: Investment Banking Interviews

Denouement Address your needs carefully. Taking a job is

a big decision. Evaluate your experiences. Which
organization treated you best? Which working
The interviews might be over, but you may still have environment and management style is likely to
The Interview

an obligation. Some firms will arrange for a meal with motivate you? Let the bank woo you.
present analysts and associates. These may be informal If you need a few extra days for legitimate reasons,

gatherings where you can ask questions of people in the dont be afraid to ask for them, or to speak with
jobs you covet and interact with potential colleagues. But someone at the organizations. Some of the people
youre still being evaluated. Behave professionally. from whom you seek advice may have been in your
position just a few years before. HR staff and bankers
INSIDER SCOOP can be flexible. Its in their interest to ensure that their
Your behavior at lunch most likely wont affect hires are happy.
their decision unless you really screw up. But I
The Interview

But be considerate. Banks have deadlines to fill

remember one guy whose jokes turned me off. their analyst, associate, and other classes. Youd be

When he started in the fall, I didnt forget it. wrong to take extra time in the hope of dramatizing
your desirability or of squeezing a few more dollars
On one occasion, a prospective candidate who from an organization. Lets keep things in perspective:
had all but clinched an offer managed to offend The firm may need you, but it can find other skilled
nearly every other candidate and current employee candidates in a hurry.
at a table. He apparently not only ate like a horse, And if you change your mind, do so as early as
but also attacked the small number of women and possible. A last-minute change of heart could prevent a
minorities in the program, and then proceeded to act runner-up from taking the position you rejected.
Prep Guide

condescendingly toward the other candidates. Not

surprisingly, he got the gong. Acceptance Process
One banker tells of a candidate who was a shoo-in You may return to headquarters for wining and dining.
for an offeruntil everybody went out for dinner: We A current analyst or associate will serve as your guide
were at the Penn Club after a long day of interviews, and and buddy. He or she will become a new friend and
this guy proceeded to get really drunk on grasshopper source of information. Dont let the attention inflate
shots and 19 other ridiculous drinks. My first thought your ego. And remember: The judging is not over.
was, Not only is he an idiot, but how could we trust How you handle the offer will be remembered.
him with clients? Could you imagine what his expense A former analyst recalls a candidate whod received

report would look like? It was inevitable that hed take an offer turning people against him by telling an anti-
advantage of the system if he already had the gall to do it gay joke. The offer wasnt rescinded, but when it came
before he even landed the job. time for group selection a few months labor, people
remembered his gaffe.
Dont lie about offers from other firms. This will come

The Offer back to haunt you. Especially in the case of summer

associates, recruiters often call around to other firms to

see who else has offers out to a particular student. If you

A Students

You got the call. They want you. accept an investment banking offer on the spot, it may
It doesnt mean you have to accept instantaneously. work to your benefit. For example, if you know at the
But it also doesnt mean you should string along your outset you want to work for a particular industry or
suitors. other group, or in the case of S&T hires, you hope

At a glance
to land at a particular desk, the decision-makers will
usually remember. In some interviews, it may even be Salary
advantageous to state that if given an offer, you would
accept on the spot. Needless to say, if the bank comes Negotiations

The Interview
through, you would not look good backing out. Our
advice: Think seriously before giving up your ability to Fact: Most of us hate haggling about money. Very

decide where you want to work. few people are good at it. If youd like some guidelines
Weigh an offer with equal parts of the left and right about how to do it better, we suggest reading the
sides of the brain. In other words, ignore earnings for a WetFeet Insider Guide Negotiating Your Salary & Perks.
moment and focus on vibes. One MBA student admits that Also worthwhile is the well-known negotiation guide
he didnt accept a prestigious offer because the recruiting Getting to Yes: Negotiating Agreement Without Giving
process with its stress interviews had left a bad taste. In, by Roger Fisher and William Ury.

The Interview
If you think you can play one firm against the Regardless of your negotiating prowess, analysts
other, tread carefully. They think they can screw us, and associates dont have much room to maneuver

says one recruiter, but they dont realize that we can here. Every few years, one of the bulge brackets ups
screw them, too. Wall Street is not that big. the starting salaries by $5K to $10K and all the other
One insider remembers a senior managing director investment banks scramble to bring their own offers
extending an offer to a student for a trader position into line. But unless youre coming in at a more senior
and reiterating that he was only going to offer once. No level or with considerably more experience than most
ritual mating dance, just yes or no. The student gave out of your peers, the numbers are pretty much fixed. You
yes signals, then accepted a position with another firm. cant change them. An insider says that the going rate
Unfortunately, the director had lots of pals at the rival now at large firms for college grads is about $65,000

Prep Guide
firm and he placed a quick phone call. You know the in base salary with a $12,000 sign-on bonus. After
end of this story: The candidate ended up without a job. six months, an incoming analyst will likely receive a

dealing with the offer

Dont Do
Tell a recruiter you have another offer when you Be fair. If you accept and then pull out at the last
dont. Theyll check. And then youll be sorry. minute, youre taking a spot away from someone who
probably really wants to be there.

Dont Do
Request an extension because youll be on vacation Accept on the spot if you know this firm is really
until after the acceptance deadline date or for any where you want to work.
other trivial personal reason. This does not win you

Dont Do
A Students

Accept a job at a firm just because of its brand Do your homework and think hard about where youd
name. Pay attention to the culture. Youre going to be most happy.
be spending a lot of time in that building. Make sure
you like just about everything there is to like about it.


At a glance
Beat the Street: Investment Banking Interviews

bonus of between $10,000 and $30,000. That may

double or triple after two or three years. An associates
base is about $25,000 to $30,000 higher.
That said, you can occasionally negotiate
The Interview

reimbursement of relocation costs and assistance

for your spouse or significant other. But part of the

rationale behind the signing bonus is to cover these

and other expenses.
The Interview
Prep Guide
A Students

The Interview The Interview Interview Interview A Students
At a glance Process Unplugged Prep Guide Workbook Perspective


Sample Q&A................................. 56
I-Banking vs
Management Consulting................ 72
Never Let Down Your Guard.......... 73
Q&A Thought Balloons................. 74
At a glance
Beat the Street: Investment Banking Interviews

Sample Q&A
You know well the areas of the investment bank. You understand the philosophy of the interviewers and
youre confident that you have what it takes to excel. But wait! Youre still edgy about the interview questions that
The Interview

youll have to field. To help you navigate the interviews, weve collected questions from interviewees, discussed
the appropriate answers with interviewers, and put together a short list of leading questions and comments about

how to approach them. Space for your own responses followsw.

Corporate FinanceAnalysts

The Interview

What is the role of an investment bank?


Many undergraduates interviewing for analyst positions dont have a clue what investment banks do.
Understanding the difference between some of the basic financial products and the ability to confidently explain
what an investment bank does will make you stand out. (For a good summary of the investment banking
industry, read WetFeets Insider Guide Careers in Investment Banking.) If you can then differentiate the bank that
you most want to work for from its chief competitors, youll be a star.
Prep Guide



A Students

At a glance
Are you prepared to work 80 hours per week, and how have you ever exhibited such dedication in the past?


The Interview
Have at least one, preferably several, examples of projects that you have cheerfully devoted at least this much time
to before. Banks are seeking drive and commitment. Show them you have both in abundance. Dedication is seen

as easily transferable.

The Interview


Prep Guide



A Students


At a glance
Beat the Street: Investment Banking Interviews

Why would you be a good analyst?

The Interview

If you make it clear to the interviewer that you understand an analysts responsibilities, youll have a much easier
time convincing him or her that you can employ your seemingly unrelated skills for building and analyzing

models, researching competitors, checking pitch books and other responsibilities. As in any industry, if you can
talk the talk, your credibility skyrockets.

The Interview


Prep Guide


A Students

At a glance
What is your greatest weakness?


The Interview
If you can examine yourself and show how youve learned from your mistakes, you will have answered correctly.
But choose your weakness carefully. You dont have to admit that youre not good with numbers; that would be

self-defeating. Recruiters are by no means expecting you to come clean. In fact, this question is posed more to
discern whether you have prepared and can maturely assess yourself. If asked to list your strengths, pick ones that
the firm wants their analysts to possess.

The Interview


Prep Guide



A Students


At a glance
Beat the Street: Investment Banking Interviews

Where else are you interviewing?

The Interview

We dont recommend lyinga real no-no in any interviewbut we dont encourage full disclosure. If you are
interviewing with consulting firms, consumer product companies, and sports marketing firms, dont admit it:

It will make you seem unfocused and tactless. Your interviewers expect you to say you only want to be a banker
and therefore you are solely concentrating your job hunt in the industry. Do not volunteer, Well, of course, an
M&A job with your firm is my first choice, but Im also talking to UBS about a trading job and to CSFB about a
research position. Remember, a focused message is important.

The Interview


Prep Guide


A Students

At a glance
What course did you most enjoy in college?


The Interview
Enthusiastic as you may have been about the theater workshop you took last year, this would be a bad
answer. Instead, think about what this investment bank does best and find a relevant course. You dont have

to say Accounting 101; if your bank is going after emerging markets, the semester you spent studying Asian
governments is a fine choice. But whatever you choose, make sure you got a reasonably good grade and that you
remember enough about the course to discuss it intelligently.

The Interview


Prep Guide



A Students


At a glance
Beat the Street: Investment Banking Interviews

Why our firm? Compare us to Goldman or Merrill.

The Interview

This is a thinly disguised Have you done your research? question. Its also a test to see if you can be honest
without seeming overly critical. Why do you like the firm? What impressed you about the people and recruiting

process? Dont concoct anything, but dont refrain from putting a favorable spin on events. For example, if
interviewers called with lots of helpful coaching, give them credit for such attentiveness. It is also critical that you
differentiate the firms culture without disparaging its competitors. An overly negative tone suggests that youre a
complainer, or at the least lack tact.
Youll also want to tell your interviewers what they want to hear. If ethics are of overriding importance at the
firm, they are of overriding importance to you. If the firm embraces contrarian views, so do you. Stroke your
The Interview

interviewers ego. For example, dont shy away from telling an interviewer that you want to work in an area where
the firm is tops.

Prep Guide


A Students

At a glance
Corporate FinanceAssociates
The questions for associates are similar from round to round. While you are charming them with your dazzling
personality and team spirit, dont let them forget that youre hungry for the job and that you like the firm. As
an MBA associate, youll be expected to act both as a team player and potential leader. How? Keep in mind that

The Interview
leadership is the ability to spur extraordinary achievement from ordinary people. Since most banking is done
in groups, a leaders success links to the output of her team. While the majority of questions will focus on your

ethics, business savvy, and general self-awareness, prepare for the random bond-math question.

What might a study-group peer say your strengths and weaknesses are?


The Interview
This question is designed to gauge your self-awareness. It also tests how well you work in teams. If you
understand the role you typically play in group situations and have a reasonably accurate grasp of how others see

you, this bodes well for you. One recruiter says she wants to hear that candidates are flexible: While at times they
might coordinate activities, at others they should show that theyre comfortable taking instruction from those
who are more knowledgeable. If you can recognize the appropriate time to step up to the plate and swing, banks
will love you. But dont put too much stress on leadership: In a recruiters eyes, candidates who claim to be leaders
all the time are unlikely to take direction well and might turn out to be poor team players.

Prep Guide



A Students


At a glance
Beat the Street: Investment Banking Interviews

If our firm didnt exist, which firm would be at the top of your list and why?

The Interview

One insider claims that this question, more often than not, reveals a candidates true colors. (The follow-
up question, of course, is But since we do exist, why did you choose us?) Our source says, If they cannot

intelligently answer why they chose our firm over their second choice then I question their interest level, not to
mention whether they have really researched the firm.

The Interview


Prep Guide


A Students

At a glance
Why do you want to be an investment banker?


The Interview
Insiders agree the worst response to this question is, Because I want to do deals and make money. What does
that say about you? Nothing. In truth, there is no perfect right answer, but sincerity is important here.


The Interview


Prep Guide


A Students


At a glance
Beat the Street: Investment Banking Interviews

Please value XYZ Company.

The Interview

This is one of the most important questions for which you can prepare. When an interviewer asks you to value
a company, be ready to walk him through your answer efficiently but also with flair. Stay away from textbook

answers, for they often sound canned and will make the interviewer question your grasp of the concept. And
though textbooks are a fine basis for your prep work, they generally cant give you enough material to deflect
the curveballs many interviewers like to lob at you mid-valuation. Like with brainteasers and case questions,
these folks need to know that you understand the process; the quantitative data of the valuation matter less. See
Valuing a Company (page 20) for more detailed information about how to handle these questions.
The Interview


Prep Guide



A Students

At a glance
Please discuss a deal you have worked on in the past and your role in the transaction.


The Interview
A word to you resume-padders out there: If you cite a deal on your resume, make sure you know the details.
Interviewers invariably ask candidates to explain key drivers behind the deal, the structure, the fees, and the

rationale behind the choice of financing. Beware EBITDA multiples. Recruiters know they trip people up, and
theyre merciless.

The Interview


Prep Guide


A Students


At a glance
Beat the Street: Investment Banking Interviews

Sales & TradingAnalysts and Associates

These recruiters do not expect undergrads to know much. Questions will focus more on your quantitative
abilities, personality, and intangibles that make great salespeople and traders. You need to show potential; your
greatest weakness and favorite course are not important.
The Interview

If youre an MBA or prospective summer intern, the stakes are higher. Round two is usually similar to round
one except that this time you meet more people. Ask intelligent questions, show that you know the markets and

this banks products, keep your sentences short and dont be shy about using your hands and facial expressions
more than you would in investment banking interviews. This is all about getting along with large egos who have
created a raw, in-your-face work environment. Theyre looking for quick-thinking, confident, thick-skinned risk-
If youre after an S&T position, prepare for the questions on the following pages.

The Interview

Demonstrate your sales skills: Sell me this desk.


This is not a cue to detail your previous sales experiences, nor to extol impressive financial sales techniques
youve read about. Rather, its an invitation to roll up your neatly pressed shirt sleeves and give them the quick
30-second hard sell. For those of you who dont have experience in sales, we suggest you structure your pitch
something like this:
What kind of desk do you use now?
What do you like about it? What would you change?
Prep Guide

If you had an ideal desk what features would it have?

May I suggest then that you check out this desk?

Do all this with as deft a combination of serious purposefulness and good humor as you can muster. The clear
message to your interviewer has to be: I know this is a goof, but dont worry, I also know what youre looking for
and I can deliver.


A Students

The Interview The Interview Interview Interview A Students
At a glance Process Unplugged Prep Guide Workbook Perspective


At a glance
Beat the Street: Investment Banking Interviews

Which are you interested in, equity or fixed income, and why?

The Interview

The two are different, and if youre still not sure why or which you prefer, do some reading and talk to people
who understand both. Once youve formulated an opinion, be sure to convey it convincingly. Also be sure to

link any related previous job experience to your choice. If you know something about commercial credit because
you once worked in a bank, use it in your pitch for an equity job. Or go for the historical rationale. Discuss why
bonds have historically been a more interesting area. Interviewers like it a lot when you can demonstrate some
understanding of the past.

The Interview


Prep Guide


A Students

At a glance
Which do you want, sales or trading? Why?


The Interview
These two are different, and if you dont know how or why, you need to. A good answer for why you want
to work in trading might be: Im pretty good at reading subtextsthrough peoples body language, voice

intonation, what they dont say when theyre talking about money. I learned a lot of this at my job at [fill in the
blank], but I also just seem to have a knack for it. I can almost always tell when someone is bluffing. Or if you
want to work in sales: I like people and they seem to like me. They seem to trust me, even though Im often
younger than they are. When I had [job X], I learned to use this in ways that helped me a lot in selling. Im also
probably not enough of a gambler to be a good trader. Doing the best job for a customer matters a lot more to
me. Traders are a lot closer to real money and risks than sales. If this excites you, say so. If it makes you even a

The Interview
little nervous, be aware that this is a reality you need to address.


Prep Guide



A Students


At a glance
Beat the Street: Investment Banking Interviews

Other Favorite Questions Please describe more thoroughly X experience

Here are some other interview favorites that might listed on your resume.
arise during your conversations with investment
banking recruiters. Play to your audience. This is not an What do you think your favorite part of the job
The Interview

encounter group moment. will be?


How well do you handle surprises? Give me an

I-Banking vs
How do you feel about wealth?
Teach me something unrelated to banking.
The Interview

Name three adjectives your roommate, family,


best friend, colleague, or employer would use to Thinking about consulting and investment
describe you. banking? Although both bankers and consultants
know that many top students are interviewing with
Tell me your biggest accomplishment. (Hint: Tie both industries, its probably best to avoid pointing out
it in to the strengths they seem to look for at this that youre talking to the otheryoull look unfocused.
firm.) The hiring processes for both are competitive and
intense, but based on our conversations with recruiters
Tell me about a difficult project you handled. from both sides, here are some of the differences.
Prep Guide

Career changers: Please tell me how your previous Consulting Firms

job experience led you to this company.
Are apt to interview candidates in the office
Give examples of projects you have done in which theyre applying to.
you used the same skills as you will use in this job.
Like Do you fit our culture? questions. This
Where do you see yourself in five years? area accounts for about 50 percent of the ultimate

Do you prefer working on a team or alone?

Love case questions focused on business operations
If you could do anything, what would you do? (for example, Why are the profits for company X
(The answer: This job. Try to make it sound going down, when revenues are rising?).
sincere. If you cant, be honest but think of lots of
ways it links to the job.) Look for a candidates ability to analyze a problem
and deduce an answer.

Tell me about the most interesting job you have had.

A Students

Typically push a candidate to the conclusion of

Give me an example of your leadership ability. the case question and often ask for implications
(Or, What kind of manager are you?) and recommendations.

At a glance
Tend to be fairly friendly (although the case
questions can be nerve-racking). Never Let
Love quantitative skills, but also seek people who Down Your

The Interview
have strong presentation and people skills.

Look for a strong interest in business.
Questions that on first impression seem
Look for stamina. irrelevant rarely are. There is almost no such thing
as an unimportant or meaningless question in an
Investment Banking Firms investment banking interview. If you are presented
with any such queries (a few of which we set forth

The Interview
Hire through the corporate headquarters, where below), use the opportunity to reveal your personality
the majority of employees work (generally in and your outside interests. Remember not to come

Manhattan). across as too self-absorbed. For example, if a particular
question affords you an opportunity to introduce your
Love Do you fit our culture? questions. Your passion for marathoning, its appropriate to let your
showing here will account for perhaps 75 percent interviewer know that you train, say, 50 miles a week.
of the decision. But dont disclose (even if its true) that you have to
run by yourself because you cant possibly run with
Tend to focus on hypothetical questions involving other people. And stay away from controversial areas
valuation, financing strategy, and markets. like politics and religion. You are not talking to your

Prep Guide
shrink, and soul-searching truth has a low priority here.
Pay more attention to a candidates process in Below are several more examples of oft-asked disarming
deriving the answer (for example, building the queries and suggested good and bad responses.
model) than to the actual quantitative solution.
Often cut candidates off mid-sentence once its If you were stranded on a desert island for one year,
apparent they know a practical way to solve a which three people would you want with you?
problem. Good answers
The former company director, who now

Hold interviews that can be more confrontational, investigates misdeeds for the SEC
or designed to create pressure on the candidate. Paul Bunyan (or some other hearty, outdoorsy,
can-do type)
Look for strong sales skills, particularly in sales Alice of Alices Restaurant
and trading. Bad answers
The former partner at an archrival who now runs
Look for a strong interest in finance. the Fed

Gilligan (or Tina Louise)

A Students

Look for exceptional stamina and drive. Lindsay Lohan


At a glance
Beat the Street: Investment Banking Interviews

If you could have any job besides banking, what would Q&A Thought
it be?
Good answer: Concert pianist Balloons
The Interview

Bad answer: Accountant

Below are some examples of real questions job

Interviewer: candidates have askedand what recruiters think

What was the last book you read (or What is your of them.
favorite book?)
Good answers: Candidate:
Jane Eyre I know your department is rated among the top three
The Way Things Work by I.I. (Institutional Investor) and is growing quickly in
The Interview

Eliot Janeways The Economics of Imperialism countries Y and Z in Asia. But both Ys and Zs currencies
Bad answers: have recently been devalued, Zs obviously more than Ys.

Stephen Kings The Stand How is this affecting your business here and overseas, and
The Joy of Cooking also your plans for the future in Y and Z?
Michael Lewiss Liars Poker
Interviewer: Better-than-average question. She understands one of
What did you do last weekend? our firms core competencies and the most obvious way
Good answers: we differentiate ourselves from competitors. Shes also
Went skiing with friends a strong candidate to get sent to Asia in a few years
Prep Guide

Read two books given her claimed proficiency in Mandarin. Wonder

Took a weekend vacation to Hawaii if shes aware of the more serious cultural and political
Bad answers: problems thereWonder how I can probe and find
Sat at home and watched TV out how deeply she understands this.
Went shopping
Knitted mittens Candidate:
How long have you been at firm X and why? What do
Interviewer: you like about the culture?
How do you spend your free time?

Good answers Recruiter:

Coaching Little League soccer Puff question. It is always easy to talk about myself.
Poking around old record shops in search of rare Should I mention how isolated I feel at times?
jazz albums Probably not. Need to reveal something, though, to
Traveling to out-of-the-way places and then make all the rest sound true.
writing about them for the The New York Times
Playing the stock market Candidate:

Your firm labels itself as innovative. Could you give

A Students

Bad answers
Watching TV me examples of its innovations?
Hanging out with my friends in bars and getting
wasted Recruiter:
Picking up girls (or guys) Too general. A better question might ask about

At a glance
innovations that are helping the bank develop better the firm in the next five years?
employees or improvements in technology.
Questions to Avoidand Their
Candidate: Dyspeptic Rejoinders

The Interview
One of the other bulge-bracket firms says your merger
with X has diluted your strength in both Y and Z Candidate:

departments. Do you think thats true? I read in the paper that there is talk of a merger
with another bank. Is this true? And if so, how will
Recruiter: it affect jobs?
A bit presumptuous, and I dont like her tattletale
opener, but its a valid question. One Id want to know, Recruiter:
too, before accepting an offer. Only senior management knows the answer to the

The Interview
merger question. I wish people could come up with
Candidate: other ways of letting me know they read the paper.

How long, realistically, might it be before I actually business card. Even if you dont make the second
begin trading/selling/meeting with clients? round this time, youd be wise to hold onto your
interviewers card for your files.
Legitimate question. He asked politely, and this is his
job were talking about. Problem is, of course, I have
no idea.

Prep Guide
Examples of Good Questions to

Ask Your Interviewer

What sort of person seems to flourish at your firm


If the firm is committed to becoming a more

global player, what impact does that have on
regional offices outside New York?

After the training program is over, what is the
process of assigning analysts and associates to
industry groups?

If youve worked on a project recently, could you

describe what you liked best about it and what

was most difficult?

A Students

How are deals staffed?

What do you think is the biggest challenge facing


A Students

Note to the Reader......................... 82
First and Foremost:
Things You Should Know............... 82
Getting the Interview..................... 84
Before the Interview....................... 85
At the Interview............................. 86
After the Interview......................... 88
Concluding Remarks...................... 89
At a glance
Beat the Street: Investment Banking Interviews

Note to What kind of person are you?

the Reader What are your strengths and weaknesses?

The Interview

What do you love and hate?

Up to this point, youve gotten a lot of advice

from career experts. Now heres insight from someone Before you begin reviewing, make sure you know
who has been in exactly the position youre in now. yourself.
Ive interviewed countless times and have plenty of
stories about mistakes I made during some of those Every Firm, Interviewer,
interviews. The good news about mistakes is that you Interviewee, and Interview Is
learn more from them than from your successes. And Different
The Interview

whats even better is learning from someone elses Be sure to understand the differences among the firms,
mistakes and successesthat is, mineand figuring including their history, culture, and business. You

out what works without having to run your own know this already, right? Well, be aware that its easy to
experiments. Here are some of my personal experiences fall into traps without even knowing itespecially if
and strategies. you havent done your homework.
For example: Goldman Sachs came to the
University of Texas at Austin to recruit for its Dallas

First and and Houston offices. On the day of the interviews,

candidates were asked about their geographical

Foremost: preferences. A no-brainer, right? The answers gotta

Prep Guide

be Houston or Dallas. However, its not that simple.

Things You In Dallas, Goldman has two key divisions: wealth

management and real estate. In Houston, however,

Should Know Goldman has its investment banking division. I heard

several candidates confidently say that they wanted to
get into investment banking in Dallas. Clearly, they
Know Yourself hadnt done their due diligence on the company. An
Before you put yourself through the I-banking immediate ding.
interview process, make sure you know what you want As you start interviewing, youll notice differences

to do and why you want to do it. Understand that in interviewing styles. The interview can be a pleasant
people get into investment banking for many reasons. experience when you meet with bankers who are
This is a challenging career, and its not the right outgoing and enthusiastic. But then there are those
path for everyone. Make sure you know what your interviewers who make their lives more interesting by
motivations are. Youll be asked about them. making ours more stressful. You will no doubt face the
Think through responses for all of these questions: full spectrumbe prepared for them all.
Regardless of whom you meet, dont forget that

Why do you want to be a banker? the interviewer is not necessarily representative of the
A Students

firms culture. Ive seen many students go sour on a firm

What activities have you done in the past? because they disliked the interviewer. Dont jump to
conclusionsor close out your optionstoo quickly.
Where have you worked?

At a glance
As for the interviews themselves, the types and about his interview. All they talked about was San
lengths are manifold. You might have the standard Antonio, the high schools they attended, and so on.
30-minute question-and-answer interview. Or you Nothing about the qualifications required for the job.
might have an interview that focuses on your behavior Despite the fact that Id felt good about my interview

The Interview
or personality, or an interview that targets technical and was confident about getting a call back, it was the
knowledge and skills. About 80 percent of my interviews San Antonio candidate who was invited to the second

were a standard mix of behavioral and technical round. An undeniable connection had been made, and
questions. The remaining ones, however, were unique. Ithe Houston nativewas left out.
For example: At one bulge-bracket firm, the In another set of interviews with a bulge-bracket
second-round interviewer focused solely on my life. firm, I interviewed on campus and had friends who
More specifically, he asked questions about what I do were also part of the interview round. Though many of
for entertainment, my best spring break, and what I us felt we had done well, none of us qualified for the

The Interview
hate about investment banking. At another firm, I met second round. So who did? The interviewer selected
with two stone-faced individualsit was like speaking someone directly from his fraternity, a candidate who

to a wall! At yet another, the interviewers introduced hadnt even been originally scheduled to interview. I
themselves and then asked me if I had any questions was furious.
for the remaining 25 minutes. What it all boils down The point of these stories: You will do well in
to is this: You dont know whom youre going to meet some interviews and still not get selected. Dont get
and what to expect, so be prepared to change gears at a discouraged; just be aware that the interview process
moments notice. can be and often is subjective.
And finally, the content of your interview will also
depend on your background. If youve interned or Stress Levels Are High

Prep Guide
worked as an investment banker, youre more likely Imagine a world in which you interviewed with your
to get lobbed some technical questions. On the other top firms, received several offers, and ultimately
hand, if youve never worked in banking before, be worked at the firm of your choice. Okay, fantasy
prepared to prove that investment banking is what aside, its time to come back to reality. In the current
youre passionate about. economy, getting into an investment bank is a serious
challenge. If you want to break into the industry, get
Interviewing Is Often Subjective ready for skyrocketing stress levels, more interviews
At some point, you will walk out of an interview than you think you can handle, and a struggle to keep
feeling confident because you feel that youve nailed the words I quit from entering your daily vocabulary.

itthat phone call to invite you to the second round My first internshipunpaidwas in Merrill
feels like a sure thing. But then, no phone call: You Lynchs private client group. I landed my second
didnt make the cut. What happened? Interviews are internship with an energy company; none of the banks
subjective, and you can never really know what an that I had targeted hired me. The following year, I
interviewer is thinking. Of course, there are certain interviewed with more than 20 firms for another
situations whose outcome may seem unfair to you. financial internship. Initially, I didnt get a single offer.
Life isnt always fair. Dont let rejection stop you. Was I frustrated? Absolutely. Giving up was definitely

For example: When I was interviewing for a recurring thought, but I refused to give in to it. If
A Students

internships, I met with an interviewer from San banking is your life goal, know that you will travel
Antonio, Texas. The interview candidate right before a rough road while youre getting started. But many
me was also from San Antonio. After the interviews, rewards lie ahead.
I spoke to the San Antonio candidate and asked him


At a glance
Beat the Street: Investment Banking Interviews

Getting the The qualified friend, of course. After all, why waste
your firms time and money in phone screening and

Interview flying out candidates for interviews when you can

bring in your friend, who you already know will hit it
The Interview

off with your coworkers, and make the hiring process

The Recruiting Shuffle quick, simple, and cost-effective. Put simply, most

Now that you know what to expect, how do you hiring managers give preference to friends or previous
go about getting an interview? The best way is to contacts. This is why you need to network.
submit your resume through your university. Many Let me explain further. My third internship
banks recruit on campus and have resume submission hunt was a frustrating experience. I thought I was
through various schools. You can also call firms directly well prepared for the recruiting process because I
and submit applications via the companys website. had completed my energy-company internship the
The Interview

Whatever you do, follow instructions. previous summer. I landed more than 20 interviews
Firms often recruit at universities that are located with many of the bulge-bracket firms and some small

near the firms operations. Most banks that recruit boutique banks. But interview followed interview and
at the University of Texas at Austin, for example, are nothing came through. Even after several second-
from the Houston area. The assumption is that because round interviews I didnt get a single offer.
youre attending school in Texas, you want to stay in Suddenly, one phone call changed everything. A guy
Texas; hence, firms recruit for positions within the state. Id met through basketball games and dorm meetings
However, occasionally firms recruit for other offices as when I was a resident assistant was now at Deutsche
well. That said, if you have a strong desire to work in Bank in its technology group. He got in touch with
New York, let a company know about your preference. me and a few others when he learned that Deutsches
Prep Guide

San Francisco office was looking for a summer intern.

NetworkingWhat Is It, Why Do After two phone interviews, the firm flew me to San
It, and How Do You Do It? Francisco. After six interviews, I received an internship
Intense networking is another effective method for offer. This experience convinced me of the impact
landing an interview. This means making connections ofin this case, informalnetworking.
through a number of routes, both formal and So how do you network? Start with people you
informal. It involves interacting with people so that already know. Make a list of anyone in the industry
you can learn about them, their lines of work, their you can talk to. Whatever you do, keep in mind that
firms, and areas of growth in the industry. With you should never ask for an interview or a job. Your

effective networking, you create ready sources of aim should be information gathering.
information and job openings. Consider this scenario: Lets assume, for example, that the mother of a
Youre a VP of company XYZ, and you are responsible friend works in banking. Call her and express your
for making hiring decisions. Recently, you learned that interest in gaining insight into the industry. Find out
the firm wants to hire another associate. You receive a exactly what she does. Ask questions about what she
stack of 100-plus resumes and have to select a handful. loves and hates about the job. Find out everything
As you look over each resume for maybe 15 seconds, possible about her firm. Learn as much as you can.

an old friend from high school gives you a call. Shes Gradually expand your network. Look through
A Students

looking for a job in banking and has kept in close an alumni database at your university. Call friends
contact with you for the past year. You know what she you know who are working in the industry. Contact
wants to do, and that shes capable, and that she has a classmates and anyone else who can help you gather
great personality. So who do you hire? information.

aT a glaNcE
When I interviewed with a representative at Goldman up. But you have to be prepared for any potential
Sachs for the sales and trading division, I wasnt invited angle an interviewer may present to you.
to second rounds. But I held onto my interviewers busi- Dont stop at researching the firms that are
ness card, keeping in mind that she worked in the San interviewing you or the industry in general. Get

Francisco office. The following year, when I worked at to know their competitors firms, too. Be prepared
Deutsche Bank in San Francisco, I sent her an email to let to explain why you prefer investment baking to

her know that I was in the area and was still interested in consulting, for example. Research markets, equities,
learning more about Goldman Sachs. She was shocked; current industry events, and more.
she didnt expect someone whod interviewed with her a Then be sure to rehearse and review the
year ago to contact her. We spoke over the phone, and she information youve gathered. Develop a point of view
invited me for lunch and later gave me a tour of the trad- from all this data. Make sure you understand it fully.
ing desk. My interaction with her helped me more than Have your friends help you with mock interviews.

I could have imagined. As she continued to guide and Start formulating responses to potential questions and
advise me on my career decisions, she became my mentor. practice delivering them smoothly and confidently.

She also helped me get an interview with the investment
banking division, and although it did not lead to an offer, SamPlE INTErvIEW QUESTIONS
I learned a great deal more about the industry. Throughout my interview rounds, I answered many of
the same questions. However, Ive also had my share of
less-than-traditional questionsranging from the very
technical to the very bizarre. Look over the list below
to get a feel for the most common types of questions
you can expect. Make sure you have a solid and

thorough answer for each.
Can you tell me about yourself?

Why do you want to work in banking?

What does an investment banker do?

What do you enjoy outside of school?

Before the Tell me something about yourself that is not on
your resume.

IntervIew Why did you choose to attend this school?

SOakINg IT all UP Why do you want to work at our firm?

Before you get to the interview, recall the three Rs of

interview preparation: research, rehearse, and review. What are your strengths and weaknesses?

You never know just what youll be askedevery

interview is different. I rarely used all of the data Whom else are you interviewing with?
that Id prepared for my interviews. Finance issues,
banking, and past work experiences didnt always come What would your friends say about you?


aT a glaNcE
Beat the Street: Investment Banking Interviews

avOIDINg SIlly mISTakES working, who your colleagues will be, and what youll
People often make mistakes without realizing theyve be doing. Remember, you are about to make a decision
done so. There are several pitfalls to avoid. First, know the that could affect the course of your life. You want to
position and location you are applying for. For example, enjoy your experience as much as possible and ensure

most banks are strategically located: Technology groups that its a good fit for your future goals.
are usually in the San Francisco area, energy groups are

in Houston, generalists are in New York, and so on. So if

you are passionate about technology banking, it doesnt
make sense to tell your interviewer you want to work in
technology but live in Houston.
It bears repeating: Know the bank youre
interviewing with. At a Lehman interview, I was

discussing trends in investment banking. At that

time, many commercial and investment banks were

merging. During one interview, I began talking about

the strategy behind such mergers. The interviewer
asked if I thought the merging of commercial and
investment banks was the best strategy. Knowing that
Lehmans strategy was to remain as an investment
bank, I was instantly on alert. I knew I had to tread
carefully. Expounding on the virtues of merging
without this understanding would have demonstrated

my lack of knowledge of the company.

When you walk into the interview room, youll

at the probably have millions of thoughts racing through

your head. Let them go. Even after Id become an old

IntervIew hand at interviews, I still found myself getting tense. I

dreaded shaking hands since my palms would always
get sweaty. Eventually, I started keeping a napkin in
ThE JUDgES ScOrEcarD ParT II my pocket; I would stick my hand in there and wipe

What qualities do interviewers look for? Some are it before extending it in a handshake. Look back at
universal: enthusiasm and a willingness to work hard. Most Common Interview Gaffes and Body Language
Its up to you to show them how excited you are about Dos and Donts to review how to make a great first
the firm and how well you fit with the culture. Think impression.
about what you would look for if you were hiring My suggestion is to walk in, shake hands, smile,
someone, or better yet, the kind of person you would and ask the interviewer how he or she is doing. I
want to work with. That would probably be someone frequently started with a greeting such as, It must

who has focus, takes initiative, works well with teams, be nice to get a break from the office for a day. This

and has an agreeable personality. opener almost always enabled me and the interviewer
Dont forget that while the firm is interviewing you, to relax. Your icebreaker is critical; it sets the tone
you are also interviewing the firm. Your goal needs to for the rest of the interviewand a conversational
be to learn as much as possible about where youll be interview is your goal.

At a glance
Initially, most interviewers will introduce to foster this is to follow one of your answers with an
themselves and then ask you to tell them about appropriate question. For example: In an interview
yourself. This is an opportunity for you to go over with Wachovia Securities, the interviewer described
your life in 60 seconds. Throughout the interview an ethical dilemma he had recently encountered. He

The Interview
process, your aim is to make the stranger on the then asked what I would do in such a situation. I first
other side of the table like you. We could get into asked a couple of questions to make sure I understood

the whole psychology of interviewing, but lets keep the situation correctly and then responded. Following
it simple: If you are trying to make a friend who my answer, I asked him how hed handled the
can push you to the next round, you need to find situation. He responded, and from there we began
something you have in common with that person. talking about ethical dilemmas in the workplace and
Your mission is to form a bond so that he or she established a rapport.
remembers you. When interviewers asked me about You also need to show the interviewer that youre

The Interview
myself, I would walk them through my educational a good listener. Demonstrating attention to detail
and work experiences. I always mentioned the time and an understanding of what a particular firm is all

I studied abroad in London, saying something about can only increase your chances of making it to
like: I went and took a course in valuation and the next round. For example: Lets say you are at an
entrepreneurship. I also went to Wimbledon and met information session for XYZ Bank. Youve been to a lot
Angelina Jolie at a movie premiere. of these before, and its hard to overcome the boredom,
With that, I was hoping to somehow connect but its definitely in your best interest to pay attention.
with my interviewer on one or more fronts. In fact, Jim, an associate with the bank, emphasizes how his
this bit of information often led to discussions about firm gives its new hires substantial responsibility. The
sports, movies, or London. In two of my interviews, next day, when you interview with him, you ask: Can

Prep Guide
all we discussed was my time abroad. Not only you describe a recent transaction that you worked on
had I managed to connect successfully so that the and the responsibility you gave to the analyst?
interviewer would remember me, but I think Id In this scenario, youve managed to score several
conveyed that I had the kind of personality that would key points. First of all, youve shown that you cared
complement the firm and its working environment. enough to attend the information session. Second,
youve proved that you listen carefully. Finally, youve
Getting to Know Your demonstrated a genuine interest in the position by
Interviewerand Using asking for a specific example. Add all of this to the fact
That to Your Advantage that you will gain valuable insight into whether youll

You need to quickly size up your interviewers style be building financial models or making copiesa key
and personality and adjust your style accordingly. bit of data in deciding whether the job is the right one
For example, if youre meeting with someone who for you later on, when youre considering the offer.
is relaxed and easygoing, it might be okay to discuss Heres another example: Lets say you are
some of your activities that are not directly related interviewing with Bob from ABC bank, and in his
to banking. You might want to use light humor if introduction he tells you he worked at XYZ bank and
the opportunity arises. On the other hand, if youre LMN bank before ending up at ABC. At the end of

meeting with a more serious person, then its best the interview, Bob asks if you have any questions.
A Students

to stay concise and straightforward, discussing only You say: Bob, you mentioned that you moved from
experiences that are relevant to banking. XYZ bank to LMN bank before you arrived at ABC.
I have found that many of my best interviews were Im curious why you chose ABC bank and what is it
the ones that turned into dialogues. One effective way specifically about the firm that keeps you there?


At a glance
Beat the Street: Investment Banking Interviews

In this scenario, youve shown that you were paying rejections

close attention to Bob when he introduced himself. Now that the interviews are over, youre desperately
You have also demonstrated to Bob that you really waiting for an answer, one way or the other. I know
do care about the firm you will go to work for. In how it feels to be in this post-interview limbo. I also
The Interview

addition, Bob gets to talk about his path in banking as knowall too wellhow it feels when you dont
well as the merits of his firmtwo topics most bankers receive an offer.

love to discuss. Lets assume that you do receive an offer. Under

To recap: You have 30 minutes to make a friend, no circumstances should you accept on the spot
convince your interviewer that you are passionate unless you are 100 percent sure its what you want. Of
about being an investment banker, and get yourself course, some will expect you to accept immediately.
invited to the next round. Since those 30 minutes could For example, I once received a call from a managing
determine the next few years of your life, you should be director who said, We want to extend you an offer,
The Interview

using every interview strategy at your disposal. and then paused. It was as if he expected me to accept
right away.

Concluding Your Interview Some firms gave me as little as one week to make
When you come to the end of your interview, ask my decision, while others offered as much as two
several questions to gather more information. Keep in months time to think things over. Ideally, we want
mind the time. If its a 30-minute interview and theres all of our offers on the table at once so that we can
one minute remaining, ask one quick question. If pick the best of the bunch. Unfortunately, the timing
youve got 15 minutes left, you probably have time for rarely works out so neatly. On the flip side, consider
more involved questions. Review the Sample Q&A the recruiters perspective. A firm may need to hire one
covered previously. candidate immediately from five finalists. The firm
Prep Guide

Be sure to say thank you, smile, and ask for a cant necessarily afford to give that person months to
business card. Even if you dont make the second make a decision, because the other candidates are also
round this time, youd be wise to hold onto your waiting to hear back.
interviewers card for your files. Then there are the rejectionsby mail or by phone.
They hurt equally. But be cordial and professional.
And keep in mind that a rejection isnt necessarily

After the absolute: An interviewer may remember your grace

under difficult circumstances and think of you for an

Interview opening down the road. If youre rejected, hold onto


your interviewers business card and make contact

occasionally. Remember that every interview is an
Thank-You Emails Cant Hurt opportunity to add to your network, even if you dont
Thank-you emails definitely cant hurt, unless they get an offer.
include a grammar or spelling mistake. Of course,
Ive known people whove received job offers without
having sent a thank-you email; in fact, its likely

that the email will be deleted. But its a good way of

A Students

demonstrating your courtesy, professionalism, and

interest in the position.

Receiving Offers and weathering

At a glance

The Interview
I hope you are feeling more confident and better

prepared for the interviews ahead. Just remember that
many things dont go according to plan. Anticipate
making mistakes: The key is to learn from them. As
you journey through the interview process, hone your
approach so that you land the investment banking job
of your dreams.

The Interview
Students Perspective Author

Vivek Shah, a Houston native, is a graduate of the
McCombs School of Business (the University of Texas
at Austin) where he majored in business honors and
finance. Before attending McCombs, Vivek worked at
Merrill Lynch in the private client services division. He
later attended the London School of Economics and
Political Science, where he took advanced courses on
valuation and entrepreneurship.

Prep Guide
After receiving full-time offers from Lehman
Brothers, Deutsche Bank, Wachovia Securities, and
others, Vivek accepted a full-time job with Simmons
& Company International, an energy investment
bank in Houston. He recently cofounded a nonprofit
business consulting company.

A Students


At a glance
Beat the Street: Investment Banking Interviews


Ace Your Case - Consulting Interviews Consulting Careers
Ace Your Case I: Consulting Interviews, 3rd ed. 25 Top Consulting Firms
The Interview

Ace Your Case II: Mastering the Case Interview Careers in Management Consulting
Ace Your Case III: Market-Sizing Questions Careers in Specialized Consulting: Information Technology

Ace Your Case IV: Business Strategy Questions Consulting for PhDs, Lawyers, and Doctors
Ace Your Case V: Business Operations Questions
Consulting Companies
Interviewing Accenture
Ace Your Interview! Bain & Company
Beat the Street: Investment Banking Interviews Booz Allen Hamilton
Beat the Street II: I-Banking Interview Practice Guide Boston Consulting Group
The Wharton MBA Case Interview Study Guide: Volume I Deloitte Consulting
The Interview

The Wharton MBA Case Interview Study Guide: Volume II McKinsey & Company

Resumes & Cover Letters Career Management

Killer Consulting Resumes Be Your Own Boss
Killer Cover Letters & Resumes Changing Course, Changing Careers
Killer Investment Banking Resumes Finding the Right Career Path
Negotiating Your Salary and Perks
Job Hunting Networking Works!
Getting Your Ideal Internship Green Careers
Job Hunting A to Z: Landing the Job You Want Survival Guide for Women in Business
Job Hunting in New York City
Prep Guide

Job Hunting in San Francisco Industries and Careers: General

Industries and Careers for Engineers
Financial Services Careers Industries and Careers for MBAs
25 Top Financial Services Firms Industries and Careers for Undergraduates
Careers in Accounting Million-Dollar Careers
Careers in Asset Management and Retail Brokerage
Careers in Investment Banking Industries and Careers: Specific
Careers in Venture Capital Careers in Advertising and Public Relations
Careers in Pharmaceuticals
Financial Services Companies Careers in Brand Management

Deutsche Bank Careers in Consumer Products


Goldman Sachs Group Careers in Entertainment and Sports

JPMorgan Chase & Co. Careers in Health Care
Merrill Lynch & Co. Careers in Human Resources
Morgan Stanley Careers in Information Technology
UBS AG Careers in Marketing
Careers in Nonprofits and Government Agencies
25 Top Global Leaders Careers in Retail
The International MBA Students Guide to the U.S. Job Search Careers in Sales
A Students

Careers in Supply Chain Management

>>Do you have what it takes to
become an investment banker?
If so, youve got to be prepared to compete with the best of
them. You have to shine in your interviews, and show your
potential employers that youve got the right stuff. Weve

Illustration by mckibillo
talked to recruiters and senior bankers at the leading rms
to nd out what separates the winners from the also-rans.



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