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【Investment Bank Interview】Technical Questions & Case Study How We Turned Rejection into IBD Offer
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Finance technical questions asked in Investment Bank interviews for finance freshers/Interns?
Getting a job at an Investment Bank is one of the most aspired career paths for many finance students. However, the recruitment process is extremely competitive, and interviews in particular test a wide range of knowledge and skills. This guide explains in detail what questions are asked in actual interviews and how to prepare for them.
1. Technical Financial Questions
Investment banking interviews always include questions testing specialized knowledge of finance and accounting. Here are main example questions:
• Explain the three methods of company valuation
• Explain the steps of DCF analysis
• Explain LBO (Leveraged Buyout) analysis
• What causes EPS (Earnings Per Share) dilution in corporate acquisitions?
• What is WACC, and how does it change when debt financing increases?
• Explain how to calculate Enterprise Value (EV) and why minority interests are added
• Explain the relationship between the three financial statements
To answer these questions, you need a solid understanding of corporate valuation, financial modeling, and accounting principles. It's particularly important to explain not just the theory but also how to apply it in practice.
2. Market Knowledge and Current Events
Questions testing market sense and information gathering ability, essential for investment bankers, are also common:
• Explain industry trends you're currently following
• Tell us about a notable large M&A deal that impressed you and your evaluation of it
• What related markets affect stock prices in specific industries (e.g., aerospace)?
• What do you consider to be the most important risk factors in current financial markets?
To prepare for these questions, daily news monitoring is essential. It's recommended to regularly read economic papers like the Wall Street Journal and Financial Times to deepen understanding of industry trends and market conditions.
3. Motivation and Suitability
Questions about why you chose investment banking and that specific company are also important:
• Why do you want to work in investment banking?
• Why did you choose our company?
• Are you prepared for long working hours?
• Tell us about your teamwork experience
• Can you share an experience of overcoming difficulties?
For these questions, you should prepare answers that go beyond superficial motivations like "wanting high income" or "wanting to work for a prestigious company," and incorporate elements such as:
・What do you want to do long-term?
・Why?
・Why investment banking to achieve that?
・What kind of career do you want to build in investment banking?
・Why not consulting or hedge funds?
4. Required Skills and Preparation
Common elements among successful candidates are:
【Technical Skills】
- Financial modeling ability
- Advanced Excel skills
- Understanding of accounting principles
- Practical corporate valuation skills
【Soft Skills】
- Communication ability
- Teamwork
- Stress tolerance
- Problem-solving ability
- Logical thinking
【Preparation Methods】
1. Technical Preparation
- Acquire practical skills through financial modeling materials
- Study past interview questions and prepare answers
- Practice through mock interviews
2. Market Knowledge
- Regular subscription to financial newspapers
- Regular checking of industry reports
- Practice analyzing M&A cases
3. Company Research
- Research target company's transaction history
- Understanding corporate culture
- Gathering real information through alumni
Investment banking requires exceptionally high levels of both soft and hard skills, and half-hearted preparation won't suffice.
The key point is that academic credentials alone won't help you pass these finance and capital market interviews. Even Harvard graduates might not be adequately prepared without proper strategy.
Therefore, unique preparation is necessary. To enter investment banking, you must acquire thorough financial knowledge.
Let me end by sharing a real case from Alpha Advisors.
The candidate graduated from a top private university in Japan. However, they were rejected from all investment banks during job hunting. They came to Alpha Advisors saying, "Please help me, I really want to work in investment banking!" When asked about their motivation, they said, "I want to be involved in M&A as a banker to revitalize Japan's economy." This is a typical failure pattern.
"Do you really want to revitalize Japan's economy? Why?"
"If you want to revitalize Japan's economy, why not join the Ministry of Finance or METI? Or become a politician?"
They couldn't even answer these two questions. Their motivation was "shallow." No matter how talented they were, this would lead to rejection.
We conducted a one-hour Skype counseling session, thoroughly examining their past experiences. We identified their core experiences and refined their reasons for pursuing M&A. Simultaneously, as their financial knowledge was insufficient, we had them thoroughly study market reports and M&A cases.
As a result, they received an offer from a top-tier investment bank. They received high praise during interviews and secured the position confidently.
The insights from this case are:
・You cannot secure a position through independent preparation
・Graduating from a famous university alone isn't enough
・However, recovery is possible with Alpha Advisors
Investment banking interviewers want to understand your long-term goals, passion, and motivation to work 24/7/365 in investment banking through interviews. They're not expecting superficial answers like "I want to revitalize Japan's economy."
Moreover, financial technical interviews aren't just testing financial knowledge, but fundamentally questioning your commitment to the finance industry. They're confirming with the mindset of "You should know this much if you want to do M&A." If you currently have no opinions about M&A, you'll likely be evaluated as unsuitable for investment banking.
Thus, investment banking isn't just about competition rates; it's about being evaluated as a business person at a fundamental level. That's what makes investment banking challenging.
However, with proper preparation and strong will, it's an achievable goal. Alpha Advisors doesn't just teach financial knowledge or prepare for financial technical aspects like financial modeling; we guide from the mindset level, including long-term goals essential for securing investment banking positions.
Our fundamental approach, not just surface-level techniques, is very popular, and we have the No. 1 track record in Japan for successful investment banking placements. If you're struggling with financial preparation or feeling anxious about job hunting alone, please consult with Alpha immediately.
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