100 Investment Banking/Finance Interview Questions
• Financial Statements
1. Explain the three main financial statements.
2. How are the three financial statements linked?
3. What is the difference between the income statement and the cash flow statement?
4. How does depreciation affect the financial statements?
5. What is EBITDA, and why is it important?
• Valuation
6. What are the different methods of valuation?
7. How do you perform a Discounted Cash Flow (DCF) analysis?
8. Explain the Comparable Company Analysis.
9. What is the precedent transaction analysis?
10. How do you calculate the Weighted Average Cost of Capital (WACC)?
• Accounting Principles
11. What are the basic accounting principles?
12. Explain the accrual basis of accounting.
13. What is the difference between accounts payable and accounts receivable?
14. How do you account for revenue?
15. What are deferred tax assets and liabilities?
• Financial Ratios
16. What are liquidity ratios? Give examples.
17. What are profitability ratios? Give examples.
18. Explain the significance of the P/E ratio.
19. How do you calculate the debt-to-equity ratio?
20. What is the interest coverage ratio?
• Corporate Finance
21. What is capital budgeting?
22. Explain the concept of net present value (NPV).
23. What is the internal rate of return (IRR)?
24. What is a leveraged buyout (LBO)?
25. What are the main sources of financing for a company?
• Markets and Instruments
26. What are the different types of financial markets?
27. Explain the difference between stocks and bonds.
28. What is an initial public offering (IPO)?
29. What are derivatives? Give examples.
30. What is the difference between futures and options?
• Mergers and Acquisitions (M&A)
31. What is the process of a merger?
32. What are synergies in M&A?
33. How do you value a target company in an acquisition?
34. What is a hostile takeover?
35. Explain the concept of a tender offer.
• Risk Management
36. What is market risk?
37. How do you measure credit risk?
38. What is operational risk?
39. Explain Value at Risk (VaR).
40. What is hedging?
• Investment Banking Basics
41. What is the role of an investment banker?
42. Explain the underwriting process.
43. What is a pitch book?
44. How do investment banks earn revenue?
45. What is due diligence?
• Financial Modeling
46. What is financial modeling?
47. What are the key components of a financial model?
48. Explain the process of building a financial model from scratch.
49. How do you forecast revenues?
50. What is sensitivity analysis in financial modeling?
• Excel Skills
51. What are some essential Excel functions for financial analysis?
52. How do you create a pivot table in Excel?
53. Explain the use of VLOOKUP and HLOOKUP.
54. What is a macro in Excel?
55. How do you perform a regression analysis in Excel?
• Market Concepts
56. What is market efficiency?
57. Explain the concept of arbitrage.
58. What is the capital asset pricing model (CAPM)?
59. What is the efficient frontier?
60. What is beta in finance?
• Regulatory Environment
61. What are the key financial regulations impacting investment banking?
62. Explain the Dodd-Frank Act.
63. What is Basel III?
64. What is the role of the SEC?
65. What are anti-money laundering (AML) regulations?
• Ethics in Finance
66. What are some common ethical issues in finance?
67. What is insider trading?
68. How do you handle conflicts of interest in finance?
69. What is corporate governance?
70. Explain the fiduciary duty.
• Quantitative Skills
71. What is the time value of money?
72. How do you calculate compound interest?
73. What is a probability distribution?
74. Explain standard deviation and its importance in finance.
75. What is the Monte Carlo simulation?
• Industry Knowledge
76. Who are the major players in investment banking?
77. What are the current trends in the finance industry?
78. How has technology impacted investment banking?
79. What are some recent major M&A deals?
80. Explain the impact of macroeconomic factors on investment banking.
• Credit Analysis
81. What is a credit score?
82. How do you perform a credit analysis?
83. What are the 5 Cs of credit?
84. Explain the concept of credit spread.
85. What is a credit default swap (CDS)?
• Behavioral Finance
86. What is behavioral finance?
87. Explain the concept of overconfidence bias.
88. What is loss aversion?
89. How does herd behavior impact financial markets?
90. What is the disposition effect?
• Structured Finance
91. What is securitization?
92. Explain mortgage-backed securities (MBS).
93. What are collateralized debt obligations (CDOs)?
94. What is the role of a rating agency in structured finance?
95. Explain the concept of tranching in structured finance.
• Recent Developments
96. What are the implications of blockchain technology for finance?
97. How is AI being used in investment banking?
98. What is ESG investing?
99. Explain the impact of COVID-19 on the financial markets.
100. What are SPACs (Special Purpose Acquisition Companies)?
These questions cover a wide range of topics essential for a fresher preparing for a technical
interview in investment banking and finance.
