Investment Banking Associate MBA Interview

Investment Banking Associate Interview Experience

This is a detailed breakdown of the actual interview questionsInterviewsA real Investment Banking Associate Interview is broken down step by step including each round of the interview and all questions asked at each stage for a summer investment banking Associate position at a global investment bank. Any references to names of people, universities, banks, or cities have been removed to keep the information anonymous.  This individual’s investment bankingInvestment BankingInvestment banking is the division of a bank or financial institution that serves governments, corporations and institutions by providing underwriting (capital raising) and mergers and acquisitions (M&A) advisory services. Investment banks act as intermediaries between investors and corporations who require capital associate interview experience went down as follows…

First round interview at the regional office

This is how the first round of my investment banking Associate interview started. I was asked to wait in the boardroom and wait for the two individuals who were interviewing me to show up. They showed up right on time, and the interview was a series of questions as follows:

• Tell us a little bit about your background and yourself
• Do you invest in the stock market?
• If I was valuing a real estate business what are the key drivers I would pay attention to
• How big would the tax shield for a company be with a $1,000 of depreciation and a tax rate of 35%?
• How does depreciation expense flow through all three financial statements?
• What is the formula for WACCWACCWACC is a firm’s Weighted Average Cost of Capital and represents its blended cost of capital including equity and debt. The WACC formula  is = (E/V x Re) + ((D/V x Rd)  x  (1-T)). This guide will provide an overview of what it is, why its used, how to calculate it, and also provides a downloadable WACC calculator?
• What is the formula for cost of equity?
• What are the three most common valuation methodsValuation MethodsWhen valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent transactions. These methods of valuation are used in investment banking, equity research, private equity, corporate development, mergers & acquisitions, leveraged buyouts and finance used in investment banking?
• Which method would I recommend and why?
• What is the total number of weddings that occur in China per year?
• There is an apple tree in the backyard – sell that tree and the apples that fall from it
• Then they gave me a couple of minutes to ask questions of them

Second round interview at head office

I was told my interview was at 2.00pm and I arrived at 1.49, and the individual in charge of organizing thought I was going to be late or no show, which seemed like a tactic to throw me off.

I was asked to hang up my jacket and leave all of my belongings in a particular room – and then they asked me to go to a “holding room”.  This room was right in between the two rooms that were being used for the interview panels.

I was waiting for my interview to begin and two individuals – a VP and Director – came into the room and started speaking about how they planned to be intimidating to the students being interviewed (knowing I could obviously hear them).

I was then taken before the first panel by one of the individuals who was interviewing me – he was an Associate.

I was seated around a round table and interviewed by three bankers – two Associates and a VP who moved over recently from a bulge bracket bank.

I was then asked the following interview questions:

• Tell us a little bit about myself
• Why investment banking?Why Investment Banking?Almost every investment banking interviewer will ask the question: why investment banking? I want to work in investment banking because it's the fastest way to learn financial modeling, valuation, Excel, and understand the nature of large corporate transactions. I'm aware the job has a strict hierarchy, very long hours
• What do you think IB does, and what kind of hours does it require?
• Why did you apply for this position?
• What do you think is the toughest aspect of the job will be?
• Why did you apply for a position at this investment bankList of Top Investment BanksList of the top 100 investment banks in the world sorted alphabetically. Top investment banks on the list are Goldman Sachs, Morgan Stanley, BAML, JP Morgan, Blackstone, Rothschild, Scotiabank, RBC, UBS, Wells Fargo, Deutsche Bank, Citi, Macquarie, HSBC, ICBC, Credit Suisse, Bank of America Merril Lynch?
• Tell us something about the market, which does not relate to Donald Trump
• Why did the university career center not better prepare me for the interview?

I was then asked to leave that panel and told to go down the hall to the other panel. I was asked to take a seat directly in front of three bankers – an Associate and two Directors.

They asked the following interview questions:

• Tell us a little bit about yourself
• Why are you interested in IB?
• If you switched careers once before, how can you be sure you won’t again?
• What are the top three characteristics you think a successful Associate has?
• What do you expect from the job?
• Tell us something about the market
• One Director then started down a hypothetical scenario where a factory that currently manufactured cars in Mexico had to do so in the US and I was asked a series of questions regarding the repercussions of doing so
• If you had a million dollars where would I invest?
• I wanted to pitch a couple of stocks, but I was cut off and asked a series of questions on valuation multiples – P/E ratio, EV/EBITDA multipleEBITDA MultipleThe EBITDA multiple is a financial ratio that compares a company's Enterprise Value to its annual EBITDA.  This multiple is used to determine the value of a company and compare it to the value of other, similar businesses. A company's EBITDA multiple provides a normalized ratio for differences in capital structure,, and what exactly these multiples meant

I went to a cocktail reception later that night, but I wasn’t asked any questions.  I mingled with undergrads who were applying for Analyst roles and I spoke with a few different individuals that worked at the bank including two that interviewed me.

More interview prep

The above experience is very typical of an investment banking associate interview experience.  The questions that were asked of this candidate reflect those covered in our other interview guidesInterviewsA real Investment Banking Associate Interview is broken down step by step including each round of the interview and all questions asked at each stage, which we encourage you to explore.

Here are most popular resources to help you prepare for a career in investment banking:

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• Investment banking trainingInvestment Banking TrainingInvestment banking training - CFI financial modeling & valuation courses for training new analysts & associates in the Investment Banking Division (IBD). Training programs typically start in the summer and last about 6 weeks. Analysts are given the opportunity to develop their technical skills in Excel, finance,
• All career resourcesCareersA real Investment Banking Associate Interview is broken down step by step including each round of the interview and all questions asked at each stage