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How to Answer Tough Investment Banking Interview Questions

Investment Banking Interview Questions

When (not if) you get peppered with tough investment banking interview questions, remember you’re not there to  find your soul mate or to have a deep heart-to-heart with the interviewer.

You’re there to sell yourself.

Interviews are a chance to fix your flaws, highlight your strengths, and spin your experience in the best way possible.

There’s a ton of information about answering “fit” and technical questions in the Investment Banking Interview Guide and on the Mergers & Inquisitions site as a whole, so I’m not going to repeat all of that here.

The specific focus of this article is how to fix your weaknesses and highlight your strengths by applying spin to common investment banking interview questions, and being ready to respond with the right answers.

That being said, if you haven’t already done your interview prep groundwork, you should definitely watch this video on How To Tell Your Story In Investment Banking Interviews first:

OK, you’ve got the basics?  Now let’s look at how to respond to the tough interview questions you’re likely to get:

6 Spin Strategies For Investment Banking Interview Questions

First, we’re going to look at 3 strategies to fix your weaknesses:

  1. Omit Information
  2. Blame a 3rd Party
  3. Introduce New Information

And then another 3 strategies to highlight your strengths:

  1. Magnify Small Events
  2. Re-Adjust the Focus
  3. Hedged Exaggeration

We are NOT lying with any of these strategies – we’re simply presenting the facts in a different way.

Omit Information

Let’s say you went through recruiting last year and didn’t get any offers – you took some time off, got other work experience, and now you’re back at the interview table because you really want to get into investment banking.

Do not mention that you didn’t get any offers or that you’ve been through recruiting once before – instead, just say that you had planned to go into a different industry but realized that you’re more interested in banking.

Sometimes you can’t do this – like if the same person you spoke with a year ago is interviewing you – but otherwise the field is wide open.

Blame a 3rd Party

Sometimes things just don’t work out – but it’s not always your fault.

It could be a family problem, an emergency, or the group itself rather than your performance that was the problem.

You have to be specific for this one to work well – citing “poor market conditions” won’t help your case.

Why didn’t you get a return offer from your summer internship?

“I performed well, got a lot of great experience, and received good reviews – but there wasn’t much cultural fit with my group, so I decided to look for groups that were a better fit.”

Notice how this interviewee takes the opportunity to point out several positives and how he cites a “lack of cultural fit,” which is a legitimate problem and something that the banker interviewing him can’t easily refute.

Introduce New Information

On paper, it looks like you have a “low” GPA of 3.2 / 4.0, which is below the 3.5 that banks like to see for interviews.

But maybe your lower GPA is because you did poorly your first year – since then you’ve been improving your grades and you have a 3.7 average over the past year.

Or maybe you’ve done very well in your Economics and Finance classes but have a lower GPA due to other requirements.

This is an easy way to answer any “Why such a low GPA?” questions in interviews.

If you haven’t been doing better in certain years or in certain classes, you shouldn’t lie because often bankers have your transcript right in front of them.

But otherwise, introducing new information is a good strategy to use when explaining away blemishes on your resume or CV.

Spinning Your Experience

OK, so now you’ve fixed your flaws by omitting information, blaming a 3rd party, and introducing new information.

How do you highlight your strengths and spin your experience into sounding even better?

Magnify Small Events

So you have no relevant finance experience… but you went to this workshop or spring program put on by Goldman Sachs for a few days last year.

Forget about all your time in the library or in the computer lab: you want to spend 90% of your interview talking about that workshop, what you learned, and how it drew you closer to finance.

Yes, activities and “interesting” experiences are good to talk about and you can bring them up in your “story” – but if you’re a career-changer, you need a really good reason why you want to do investment banking.

So even if that workshop only lasted 3 days, it could easily be a life-changing experience.

Re-Adjust the Focus

You studied abroad in Japan for half a year, but spent 175 of those 180 days drinking sake and going clubbing.

No problem: just focus on the 2 days where you climbed Mt. Fuji and the 3 days where you toured the Tokyo Stock Exchange and got to observe the finance industry firsthand.

Laid off for 6 months and spent the time surfing and watching DVDs?

No problem: just focus on the week you spent on your uncle’s sheep farm and spin a story about how you learned leadership and team management by tending to the animals there.

Focus on what’s relevant and cut out the rest.

Hedged Exaggeration

So you’re discussing an internship or full-time job on your resume, but you’re not sure how to explain what your contribution was?

Easy: just borrow someone else’s contributions.

You don’t want to say, “Negotiated $500 million deal and earned bank $10 million” as a summer intern, but you can say that you, “helped senior bankers to win a $500 million deal by assisting with the pitch and follow-up valuation work.”

And when you really don’t know what the result was or what happened after you left, frame it in terms of potential: you worked on a “Potential $100 Million Acquisition.”

Spinning Your Way to Success

Think about your weaknesses and figure out how you’ll fix them by omitting information, blaming a 3rd party, or introducing new information.

Then, go through each experience you have and make it look even better by magnifying small events, re-adjusting the focus, and hedging your exaggeration.

Then go forth and dominate your interviews.

More Investment Banking Interview Success Resources

If you want to learn even more about how to spin your way to success in interviews, check out these articles:

Talk soon,

P.S. To learn even more about investment banking interviews, how to tell your story, how to spin, and how to answer all the fit and technical questions you could possibly get, check out the BIWS Investment Banking Interview Guide.

P.P.S. Get here from an email forward, a friend’s link, or a random Google search?

This lesson is part of The Banker Blueprint newsletter – which gives you all the tips and insider information you need to break into investment banking.