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The Toughest Investment Banking Interview Questions & How to Answer Them

AlexLielacher1

New member
Jan
48
2
Global Markets
Having sat over 50 interviews during my time at an investment bank and several more during my career, I heard and asked a fair share of annoying interview questions. In this post I would like to share them with you. As this is a forum for university students looking to break into finance, I will focus on the most common graduate interview questions that you can be asked & how to tackle them.

What are your weaknesses?

This is by far the most annoying interview question in my opinion; no candidate will ever reveal their actual weaknesses, like having a short temper or having an issue with authority. Making this question more of a game of ‘who can come up with the best sounding lie’. Nonetheless, it is a very common interview question and needs to be addressed. Your answer should NOT be the common responses such as ‘I work too hard’, ‘I am too much of a perfectionist at times’ and the likes.

Generally, you want to name a weakness that doesn’t really affect your role and in the same answer mention how you have either overcome or are working on improving this weakness.

Alternatively, you could answer with a weakness that is pretty much completely irrelevant to your job; that also works. An example of the latter would be “I have trouble disconnecting from technology and find myself on my phone, tablet, laptop, etc. all the time.”

Why this bank?

“Because GS didn’t invite me to the second round and JP did not come knocking at my door” would have been my truthful answer but clearly not one you can actually give.

The truth is as a graduate in the current economic climate you are happy to get a graduate job at ANY bank, whether it’s a tier 1, tier 2 or tier 3 shop. Get off your high horse. However, as annoying as this question may be, it is important that you have a specific answer related to the bank you are interviewing with. Find out what the bank’s strengths and/or growth markets are and highlight those as reasons in your answer.

For example, if you are interviewing with an Asian, Australian or emerging markets-focused bank, highlight the strong growth potential of the Asian markets, and that bank’s footprint there as a reason why you want to work at that particular bank.

Why should we hire you?

You might want to answer “Because I am as good as any of the other graduates form top tier universities with previous internship experience” but it's not a good idea. You should highlight the points that differentiate you from other candidates, such as specific finance related extra-curricular activities or achievements and how they relate to you having a genuine interest in the industry and are driven to succeed in it.

How do you handle stress?

This was a question caught me off guard when I was asked it. I don’t remember how I exactly responded but it must have been something along the lines of “I handle it pretty well”, which wasn’t really what the interviewer wanted to hear.

You obviously can’t say that in times of stress you go on a massive coke binge and go boozing every night to cope. It’s important to highlight your ability to maintain a certain degree of work/life balance.

That’s what employers wants to hear. Mention your sporting activities (or other healthy living practices) and spending time relaxing with friends and family. Stress is a big part of any job in banking anyway, so employers want to make sure you won't burn out in a few years.

What would you do if your manager told you to do something that you deem as unethical?

The real answer to this question is that you will most likely go ahead and do it, provided it isn’t outright breaking the law or engaging in clear regulatory breaches, such as front running or insider trading. If the person who decides whether you keep or job or not, or whether your bonus will be £100,000 or £0, tells you to do something, you do it. That’s reality.

However, that is obviously not how you should answer this question. When an employer asks this it is to gauge whether you could potentially end up becoming a regulatory risk due to unethical behaviour. If you don’t show respect for the rules, you will definitely not get hired. Hence I recommend responding with that you would challenge your manager and voice your concerns over the unethical seeming action. If your manager would then still want you to continue, you would voice your concerns to the compliance officer and wait for a response from him regarding what the correct plan of action is on this matter. This is arguably a tricky question and you need to somewhat tailor the question to whoever is asking it, but the key to answering this question, is that you would always follow the rules.
 
Hi Alex, fantastic post. These are all common tricky interview questions! All require you to show research, either of the bank or mostly self-awareness of yourself! Questions about weaknesses sound normal but rarely are, and I can definitely see a shift to more strengths-based questionning too, e.g. those last ones. I've had questions like "do you like challenges?" and of course this lends itself to a yes/no answer but this is not what they want! Equally the last one about ethics sounds like it's a very simple answer of "do it/don't do it" but as you say you have to list out the permutations and severity of the unethical act etc and talk through your thought processes.
 
Hi. Job interviews are very much a game.
You are not expected to provide truthful answers, just the "right" answers. This goes to prove that you have bothered to think before opening your mouth, and that you are aware of what is it the interviewer wants to hear.
This goes to show that you have awareness - of how things work - or should work.
 
Thanks for sharing your experience! In my view, the interviewers are aware that those are challenging questions and they themselves would have a difficult time answering them. They ask those questions to get an idea of your nature and way of thinking. I have also been asked a few tricky questions similar to the last one that you mentioned.
1) What would you do if an important client asks you to do something that might be unethical?
- If you decline his request, you will be running the risk of losing him as a client (negative impact on future business)
- If you comply with his request, you might be putting your department /the bank at risk (e.g. regulatory problems)
2) Tell me about a time when you challenged the actions of someone who was more senior than you.
- If you question the decisions of senior people often, you can lose your job fast
- If you never question the decision of senior people, you can increase the risks for the bank.

This type of question requires answers that strike the right balance between the risks resulting from the situation.
 
Thank you, very interesting. Also regarding the weaknesses, I like to give a weakness, and add that I am working on it by doing X or Y. This shows that I am aware of it but that I am working towards improving and not having this as a weakness.

Good point on "why this bank" - an interesting answer could also be to say that you have followed some of the recent deals the bank has done, and that they caught your interest because X or Y.

The last question about unethical actions, I have never had to answer that and am glad I did not have to! It is indeed quite a tough one.
 
Thank you, very interesting. Also regarding the weaknesses, I like to give a weakness, and add that I am working on it by doing X or Y. This shows that I am aware of it but that I am working towards improving and not having this as a weakness.

Good point on "why this bank" - an interesting answer could also be to say that you have followed some of the recent deals the bank has done, and that they caught your interest because X or Y.

The last question about unethical actions, I have never had to answer that and am glad I did not have to! It is indeed quite a tough one.
More of a general piece advice: be aware of your weaknesses, but rather focus on improving your strengths than your weaknesses to aovid becoming average on a lot of things rather than being truly awesome on a few things
 
Really appreciate this post, Alex. Refreshingly honest. As someone involved in the industry, when interviewers ask these cliché questions, are they doing so with a grain of salt (a procedural part of the interview) as most interviewers will give the same answer and then ask more nuanced questions to distinguish you? Or, conversely, are these questions generally weighted heavily and it's our burden, as interviewers, to maximise our response to these typical questions?
 
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