In our recent informal survey, being an equity research analyst was ranked as one of the most stressful jobs on Wall Street, finishing just behind the ranks of investment bankers, traders and compliance officers. The interview is no picnic either. Whether on the buy or sell side, expect a wide range of questions that will touch on market specifics and a number of hypotheticals. You should also expect an inquiry or two about your grandmother, apparently.
Below is a list of questions asked of full-time and internship equity research candidates on both the buy and sell side. They were asked of applicants over the last two years.
- If you are McDonalds which is better: A 5% increase in the price of all existing products (assuming price inelasticity) or a 5% increase in total volume as a result of a new product?
- If you want to analyze a chemical company that you are not familiar with, what will you look at first?
- If I were to give you a company’s annual report to research a company what would you look at first? Why?
- Explain research to your grandmother.
- Why sell side or buy side?
- What do you think about Obama’s effect on the economy? What about TARP?
- How has your previous experience prepared you for a stressful work environment?
- What industries are cheap for stocks?
- Have you made poor investment choices in the past? Tell me about it.
- What is the weakness of PE valuation?
- How does high oil price impact to our economy?
- Given two companies – one wants to increase square footage, and the other same-store sales – which would you rather invest in?
- Your grandma’s broker suggested that she sell a call on IBM stock. What would you advise her?