Competency Questions

[Edit] Describe a time when you exhibited good team work? Provide an example of when you encountered problems in a team? Explain an instance when you influenced someone? Describe a situation in which you changed something? Tell me about a situation where you showed leadership? What is your biggest achievement? How would you invest 10,000 pounds? Tell me about a time when you failed to meet an objective. Provide an example of a situation in which you had multiple competing deadlines how did you prioritize? Who is a leader you admire and why? Describe a time when you successfully persuaded a group of people or a team to agree with you? Describe a time when you had to give a presentation to a group of people? How do you adapt your presentation style to meet the needs of an audience? Did you meet the deadlines? What did you or would you have done if you were unable to meet the deadlines? You're taking a document to an important client meeting that starts in five minutes and you find a critical typo. There is no time to reprint. What would you do? Which is better: to be respected or to be respectful? Describe a time when you used your negotiation skills? Which is better: meeting a deadline or doing a perfect job? What three things would your friends say about you?

Motivational Questions

[Edit] Why did you choose JP Morgan? Why did you choose this department over the other departments? Where do you see yourself in 5-10 years? Why did you pick your university? Why did you pick your university course? Are you planning to do MBA? What motivates you? Why do you want to work in this industry?

Commercial Awareness/Technical Questions

[Edit] What do you think Finance at J.P. Morgan does? What's going on in the markets currently? How do any new regulations influence the bank? Tell us any recent financial news? Who are J.P. Morgan's key competitors? What caused the recession? How could a financial crisis be prevented/solved? What do you think you will be doing in your first year/internship at JPMorgan? What's 17 x 18? What is share capital? What is IPO? For certain positions, you will also likely to have to:

Solve a riddle Draw some graphs

Do percentages and arithmetic mentally TIP:The most important thing to do in this interview is keep your cool. They will be trying to find your breaking point. Do not panic and become flustered, this is the response that they are trying to achieve. Take your time when solving problems, and do not be afraid to speak your reasoning out loud

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62 Advanced Investment Banking Interview Questions

by Erin Parker

The following is an excerpt from the Interviews chapter of our insider's guide These are questions that we use to interview Directors of the Blyth Fund, Stanfords student managed 6-figure portfolio. Directors are members with 1 year of experience who have led several stock pitches, are voting members of the board, and are the leaders and teachers in the fund. These questions are intensely valuation oriented and a lot of them require deeper thought and explanation. I find these questions to fit perfectly well with the types of questions very competitive juniors and seniors are likely to get asked in finance interviews. If you can answer these questions and if you understand the interrelationships between these financial concepts, youll be totally set for your interviews. Youll be the pre-trained candidate that banks are looking for.

Valuation Questions:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. What are the three ways you can value a company? Walk me through a Discounted Cash Flow (DCF) model. What is the formula for Free Cash Flow? What is the formula for Weighted Average Cost of Capital (WACC)? What is the difference between levered & unlevered free cash flow? How do you calculate enterprise value? What is the difference between enterprise value and equity value? What is working capital and why do you add the change in working capital to FCF? What is the present value formula? Why would you lever and unlever beta? What comps would you use in a comps model to value companies in X sector? Why would you use EV/Revenue comps when we can use EV/EBIT? Why would a ratio like EV/Net Income not make sense? How is a companys capital structure different from its operating structure? How do you calculate Cash Flow from Operations on the Cash Flow Statement? Why does an increase in an asset decrease Cash Flow from Operations? In your explanation, explain the link to working capital. Why does an increase in a liability increase Cash Flow from Operations? In your explanation, explain the link to working capital. What is the CAPM model? What is the link between the balance sheet and the cash flow statement? Whats the difference between expensing and capitalizing? In which financial statements does Net Income appear? Run me through the three financial statements if depreciation increased by $10. When would you not use a DCF to value a company? What would you use in its place? Walk me through the treasury method. Where would you find total number of shares outstanding of a company? If you could only bring one financial statement with you, on an island, which would it be? How do you select comparable companies when putting together a comps model? How do you know if your DCF is too dependent on future assumptions? Should the cost of equity be higher for a $5bn or $500mm mkt cap company? Will WACC be higher for a $5bn or $500mm mkt cap company? What is the Gordon Growth terminal value formula?

Market Questions:
1. Where is the Dow at?

2. Where is the S&P at? 3. Tell me about a stock you follow, where its price is today and what its price was yesterday. 4. Tell me about a recent article you read in the paper and how you would make a trade off of that article. 5. Pitch me a stock. 6. Pitch me another stock. 7. Now how would you hedge that pitch you just made? 8. What are some points that refute the pitch you just made? 9. What stocks / sector do you follow? 10. Teach me about how to analyze investments in XYZ sector. 11. Where do you see markets going next year? 12. Tell me about two companies that should merge together and why.

Economics Questions:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. How does the Fed conduct monetary policy? What is the relationship between inflation and interest rates? If the federal funds rate decreases, does this weaken or strengthen the dollar? If bond spreads are increasing, what does this tell you about the state of the economy? If the dollar weakens, what happens to company earnings? What happens to the strength of currency when inflation rises? What happens to inflation, interest rates, and bond prices when the dollar weakens against the yen? Say the USD strengthens. What happens to: earnings, inflation, and interest rates? Say the USD weakens. What happens to: earnings, inflation, and interest rates? Tell me about some economic indicators that you follow and where theyre trending. What is the effect of inflation on bond prices and why?

Portfolio Questions:
1. When you add a risky stock to a portfolio thats already risky how is the overall portfolio affected? 2. If the CEO of a company states that his stock is doing well and has gone up 20% in the past 12 months, is the company actually doing well? 3. If you read that a given mutual fund performed 50% ROI in the past year, would you invest in it? 4. Should I add XYZ stock to the Blyth Fund portfolio? 5. What does a correlation coefficient of -1, 1, and 0 mean?

Options Questions:
1. 2. 3. 4. Whats the difference between a call and a put? Whats the difference between a naked and a covered call? Why would we want to buy an option instead of buying/shorting a stock? How might we be able to hedge a position with options?

JPMorgan: Sales and trading (internship)*

by Anonymous1 January 2011

Question:

Why J.P. Morgan and why sales & trading? Students Answer: Because JP is one of the top global players in commodity traiding, which is my field of special interest. After the Acquisition of RBS sempra commodities JP could even improve its standing in this area. Question: Who is J.P. Morgans CEO? Students Answer: Jamie Dimon Question: Wheres J.Ps share price? Students Answer: Around $44. Question: Tell me about a project where you actively contributed to a group success. Students Answer: I told her about a corporate business challenge where I as a teamleader had to coordinate several parts of an assignment and communicate with team members who were partly abroad. Question: Where is the gold price at the moment and what do you predict for the oil price? Students Answer: (I felt I needed to be more up to date about the indices especially commodities). Question: Is there any stock you follow in the markets? Students Answer: I told her about an Austrian stock that I had in my portfolio and a fund that I was also following closely

Question: Who is managing the fund, what is the funds strategy and why did you pick it? Question: Tell me some recent event on the news that caught your interest or is somehow related to you, your hobbies, etc. Students Answer: Here I picked a financial event which I think she liked, I told her I was competing in an investment competiton and therefore had to follow financial news specific to Austria (I invested in Austrian shares) closely.

These questions were provided to us by a candidate claiming to have interviewed at the bank named above. We cannot guarantee that these were the actual questions asked

Other questions students have been asked at banking interviews

If you have been to an interview or assessment centre recently please fill in our interview report form to help other students. About your study, work experience and skills

Talk me through your CV (Goldman Sachs) Most of the questions asked were based on the Curriculum Vitae that you submit to them. (United Bank for Africa) What did you study? Tell me about your course. (Citibank) Why did you choose your A-levels? (Morgan Stanley) Tell us about your degree course and why you chose it? (Citibank) Tell me about about your work experience. (Citibank) How can you relate your studies and experience to your work with us? (Citibank) Questions relating to social and extracurricular activities during my degree (Citibank) Tell me about your interests and the level of sports at which you play. (Citibank) How can you relate your studies and experience to your work in Citibank. Why should we hire you and not anyone else. (Citibank) Where do you see yourself in 2-5 years? (Morgan Stanley) Where do you see yourself in the future? (Goldman Sachs) What is your ambition career-wise? (Fidelity Investments)

Competency questions. See our page on How to Answer Competency-based Questions

Tell me about a time where you have managed risk (Goldman Sachs) Give an example of a mistake you made/what did you do about it? (Fidelity Investments) Tell us of a time when you've failed at something. (J.P. Morgan) Have you ever made a mistake? Tell us about it. (J.P. Morgan) Give an example of when you worked under pressure. (KBC Financial Markets) Describe a time at work when you coped with a problem (KBC Financial Markets) What is the most difficult decision you've had to make?

How do you prioritise your work at the moment? (Fidelity Investments, Citibank) What's more important - deadlines or quality of work? (Goldman Sachs) Give an example of where you have had to process information Give an example of where you have had to work with people/customers Give an example of when you have taken initiative. (J.P. Morgan) Describe a time when you communicated effectively. (Barclays Capital) Tell me about a time where you have shown leadership (Goldman Sachs, Barclays Capital) Give an example of where you have had to motivate others. What opportunities have you had to work in a team and what would you say your role was? (Barclays Capital) Give an example of when you worked in a team. (KBC Financial Markets) Give us an example to show you're a team player. (J.P. Morgan) Technical skills on computer especially Excel. (KBC Financial Markets) Tell me about your strengths and weaknesses. (J.P. Morgan) What would you friends say is your strongest point? (Morgan Stanley) What key skills could you bring to us? (Goldman Sachs, Morgan Stanley)

Commercial Awareness Questions. See our page on How to answer Commercial Awareness Questions

What did you think of our presentation/what did you learn? (Fidelity Investments) What skills do you think were looking for? (Fidelity Investments) What do you know about us? (Morgan Stanley,KBC Financial Markets, Citibank) Why do you want to work for us? (J.P. Morgan, Goldman Sachs, Citibank) What attracted you to us? (Morgan Stanley and Goldman Sachs) Why Goldman over other banks? (Goldman Sachs) What can you tell me about Goldman Sachs? (Goldman Sachs) Tell me what you know about the investment banking industry. (Morgan Stanley) Why do you want to work in investment banking? (J.P. Morgan, Goldman Sachs) What is the main function of an investment bank? (Morgan Stanley) Why do you want this particular job? (Citibank) Why have you applied to Global Credit Risk Management rather than trading? (J.P. Morgan) How much of an impact do you think this job has on the company as a whole? (Fidelity Investments) What did you learn about the different roles? (Fidelity Investments) Where does Goldman make most of its profits? (Goldman Sachs) What would you say is the most important aspect of our work culture? (Morgan Stanley) What does the Operations and Finance division do? Who are our clients? (Morgan Stanley) Why operations? (Goldman Sachs) What do you know about operations? (Goldman Sachs) What does operations do? (Goldman Sachs) What skills are required for operations? (Goldman Sachs) Why is operations important? (Goldman Sachs) What are the problems facing key operations workers? (Goldman Sachs) How do you think the economic crisis will effect Operations? (Goldman Sachs) What kind of tasks do you think you would be working on in operations? (Goldman Sachs) What are the core competencies needed for operations? (Goldman Sachs) Why have you applied to GCRM rather than trading? (J.P. Morgan) Technical questions re. finance and equity markets. (KBC Financial Markets) Knowledge of financial markets, current developments in finance world. (KBC Financial Markets) What do you know about the financial crisis? (Goldman Sachs) Given the recent economic crisis, banks have been given a lot of bad press, do you think it's all our fault? (Goldman Sachs) Do you agree with Obama's views about separating banks duties? (personal and investment? (Goldman Sachs) What are the differences between equities and bonds? (Bloomberg) What is the current price of a barrel of oil? (Bloomberg)

Hypothetical questions. See our section on this

If you had a very large assignment how would you structure your time to make sure you met the final deadline? (J.P. Morgan) If I told you a list of 7 things to do and walked off, what would you do? If you couldn't finish all of them by the end of the day, what would you do? (Morgan Stanley) If you had a very large assignment how would you structure your time to make sure you met the final deadline? (J.P. Morgan)

MARKET SIZING questions These evaluate your temperament and analytical skills and are often used in CASE STUDY interviews by consultancy and banking firms. They test your logical, analytical, numerical and problem solving skills. A lot of the skill in answering these questions involved making reasoned estimates of the market size.

How many women sell AVON products in the UK? (McKinsey) How many photocopies are taken in the UK each year? (McKinsey) How many piano tuners are there in the UK? (A brain-teaser they want you to logically arrive at a guestimate e.g. 10,000,000 households in the UK, 1 in 5 have a piano etc.) (LEK) Give the weight of a fully loaded Jumbo Jet at take-off. (LEK) How many lightbulbs are there in London? (J.P. Morgan) How many degrees are there between clock hands at 3.15? (J.P. Morgan)

For help with answering these see our page on CASE interviews

Psychometric tests
Most investment banks give you demanding numeracy tests as part of their selection procedure. The nearest on-line practice tests for these are those on the efinancial careers site at http://students.efinancialcareers.co.uk/numerical_test.htm Our Second Practice Numerical Reasoning Test is also quite similar but you would probably need to be scoring at least 19 or twenty on this to have a good chance of passing the real investment bank tests.

Numerical 20 minutes for 20 questions. Finding percentage increases and decreases, compound interest questions. Verbal 15 minutes for 30 questions. Typical 'True' 'False' or 'Cannot Say' questions (Barclays Capital) Numerical and verbal both in the first round - No calculators were allowed. Each last for 30mins. Typical questions such as those on the SHL website, ratios, percentage changes. Verbal was true/false/cannot say type questions. (Goldman Sachs) Numerical and verbal. 20mins each. Numerical was data interpretation. (Goldman Sachs) Verbal and numerical (no calculator was allowed!) 30 mins each. Same type of questions as the standard SHL test. Practice numerical tests without a calculator. (J.P. Morgan) Verbal reasoning: short texts had to say whether statements were true, false or not possible to answer. Proof-reading: had to compare 2 versions of texts look for mistakes, describe what kinds of mistakes they were. German: short conversation with native speaker. (Fidelity Investments) Numerical, verbal and current affairs. This was done prior to the interview date. Don't take mental arithmetic for granted. (United Bank for Africa)

Other components

No presentation, just a short introduction of ourselves to rest of group. We got shown around the offices, saw the people at work, they told us about the job. We got plenty of tea/coffee and biscuits as well as a huge lunch. (Fidelity Investments) Presentation to two interviewers. Prepared for the presentation individually and presented it to interviewers. (Barclays Capital) We individually prepared for the group exercise and then brought our contributions into a group discussion. (Barclays Capital)

Group Exercises. We had to prioritise importance of certain items after a pretend plane crash in the desert, where we were the only survivors, firstly as individuals, then we had to do it as a group. (Fidelity Investments)

Tips from Kent graduates

Thoroughly research the company and be prepared for them to delve very deeply into the answers you've given in your initial application. Very impressed. Excellent offices, very intelligent and friendly people. (J.P. Morgan) Very welcoming atmosphere, fast paced, and everything you need is under one roof - 24 hr. food; dry cleaners; hairdressers; gym etc. (Morgan Stanley) Don't panic. Be yourself. Do thorough preparation before your interview. There is a positive correlation between preparation before your interview and your chances of securing a job. There is a lot of information on the University's Careers website. Make use of this information. (Barclays Capital) Theres not really any way to prepare for it just make sure you listen to the presentations carefully, but you dont need to remember everything. The first thing they ask everyone is what do you know about Fidelity? Its a good idea to make sure you can answer confidently. (Fidelity Investments) You have to be ready for simply any question relating to your CV and career. (Citigroup) The interviewers were looking for a loophole in your CV so I'd advise that you know your CV very well. Don't put in your CV what you cannot defend on the table. Prepare lots of competency answers. Brush up on commercial awareness as questions can be very technical and hard if you don't know what you're talking about. (KBC Financial Markets) Be relaxed. Know your CV and experiences well enough to talk about them. Know Goldman Sachs i.e. culture, departments, recent knows. Have a few questions to ask - show your interest and research. Very positive impression. Keep up to date with general news. Remember you are being interviewed as soon as you step in the building. (Goldman Sachs) Relax! Know your CV well! Know about your role i.e. skills required. Know about Goldman Sachs i.e. what they do etc. (Goldman Sachs) Know Goldman inside out - their website, what business areas they work in. Be able to talk about every aspect of your CV and cover letter and have a lot of examples to give. (Goldman Sachs) Thoroughly research the company and be prepared for them to delve very deeply into the answers you\'ve given in your initial application. (J.P. Morgan)

Comments

The interviewers were really nice and this helps one to relax. I enjoyed the entire interview experience; a well-structured Assessment Centre. (Barclays Capital) Its a very relaxed laid-back atmosphere and all the people are really nice. They dont ask you to do anything scary and your performance is judged as far as all the different exercises are concerned. It was actually very enjoyable and a good experience. (Fidelity Investments) Always show confidence in yourself whether you feel you'll get the job or not because there are some interviewers who would try to bring down your morale. (United Bank for Africa) Nice company not very formal, people were very friendly. (KBC Financial Markets) Very impressed. Excellent offices, very intelligent and friendly people. (J.P. Morgan)

More questions (from efinancial careers http://bit.ly/hnDKKS)

Citigroup: Global markets (intern position)

What is Citi's best area in terms of its Global Markets business? Who is Citi's CEO? What is 21x19?

Barclays Capital: Sales (internship)

What has the euro/pound exchange rate done in the last 6 months and then what has it done in the last year? How do insurance companies view bonds? What do you think will happen to Ireland?

Barclays Wealth: Wealth management (graduate programme)

Could you please mention some of the challenges that the private banking world is currently facing? What are your developing areas both profesionnaly and personally ? What differentiates Barclays Wealth from its competitors? What do private bankers do? What do you know about Barclays Wealth? Speak about a time when you faced a challenging experience. What did you do to overcome it? What was the result? What set of skills does a private banker need?

Goldman Sachs: Equity derivatives marketing (off-cycle internship)

What is different about Goldman Sachs? Why are you interested in derivatives ? What do you think about our derivatives website ? Which Financial Media do you follow ? What is moving the markets in the moment ? Which structured product would you issue in the current market conditions ?

Global investment research (graduate programme)

Why are you better than other candidates at picking stocks ? If I gave you 10 million euro, would you either buy a 5-star hotel in the centre of Paris or 5 cheap motels along the ring road ? What is your top pick ?

JPMorgan: Risk (graduate position)

Give me an example of a person you think has integrity and explain why. Give me an example of a person you think is credible and explain why. Why do you want to work in risk within an investment bank and not a corporate bank, an insurance company etc.? What's 1/16? Draw me a call option. What's the angle between the hour and minute hands when it's 3.15pm? How would you persuade a German pensioner to save Spain?

Lazard: Investment banking (graduate position)

Why Lazard? Explain the financial crisis Can you tell me about a time when you had a disappointing result? Please describe some methods of valuation? What will cause a valuation to increase? What motivates M&A activity? Can you discuss a recent news story...

UBS: Equities sales and trading (summer internship)

When have you shown leadership? What is 2.2^2? Talk to me about your portfolio of shares. When are you going to sell share x? There are ten bottles of pills. 9 have good pills in them, weighing 10g each and 1 bottle has bad pills weighing 9g each. For arguments sake there are an infinite number of pills in each bottle. You also have a set of electric weighing scales and you are only allowed one 'weigh' How do you find out which bottle has the bad pills in? (You have to have one combination of pills to find the answer, so you can't put a bunch on the scales and then keep taking them off one by one to find the right