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If You Want a Finance Job, Have Answers to These Questions

Job interviews are stressful, grueling and often times painstaking, especially for recent master of business administration graduates eyeing six-figure jobs at investment banks, hedge funds and other top financial firms. Softball questions are often tossed aside, with most inquiries looking deeper into a candidate’s behavioral and quantitative abilities.

Part of every M.B.A. program’s curriculum is preparing students for interviews for summer internships and full-time employment. New York University’s Leonard N. Stern School of Business takes the preparation process a step further, collecting real interview questions hiring companies ask its students.

Below are some of the most interesting we’ve found. These are the questions you need to be able to answer to get a job with asset managers, commercial banks, private wealth managers and other finance firms. A few even come with answers.  Up next week on eFinancialCareers: the toughest interview questions posed by consulting companies.

  1. How much did the S&P increase/decrease this year? What will the S&P be at the end of next year? Why?
  2. What will you do if the stock falls 30% after one month of your Buy recommendation.
  3. What’s your favorite investment idea right now (could be geographic or sector focused)?
  4. If you could buy one stock for the next 50 years what would it be? Answer: Coca-­Cola for example. They want to see a stock that can grow over time at a compound rate, less cyclical, less elastic to small price changes, management doesn’t matter, selling a product people are willing to pay a premium for.
  5. Tell me about a time when you persuaded a person or group to do or think what you wanted?
  6. Which ratios would you analyze to understand the liquidity, the efficiency and the profitability of a company?
  7. A long-standing corporate client decides to offer the lead role in a new debt offering to another bank. If, at all, how would you approach the client in future dealings?
  8. Who is the CEO of Global Citi Cards?
  9. How would you get somebody to invest with you if you are competing against a 15-year veteran from another company?
  10. What is the biggest misperception that people have about you that is NOT true?
  11. So you play poker? What are the odds of flopping a flush if you have two cards of the same suit? What about the turn if one of the cards on the flop is off suit? How about the river? What if there is $200 in the pot and the guy ahead of you bets 40. Do you make the bet? How many people must bet before you have good “pot odds”?
  12. Two companies in the same industry.  Company A raises price and Company B increases production capacity. Which one is better?
  13. Let’s say I have two envelopes. And I tell you that one has twice as much as the other one. You open the first one and it has $100. You may open the second one but you forfeit the $100. What do you do? Answer: Open the second one. Expected value is $125.
  14. Rank the following securities in order of riskiness to the investor:  Aircraft leases, tax liens, credit card receivables and sub-prime mortgage backed securities.
  15. I’m going to give you five plays in baseball and you tell me which one you would rather complete. 1. Hitting a lead-off double. 2. Completing an un-assisted double play. 3. Sacrifice bunting a runner from second to third. 4. Hitting a double and scoring the runner who was on second base. 5. As a pitcher striking out the other team’s best hitter. (Asked to a student interviewing for a sales and trading role).

Comments (9)

  1. Answer to 14:

    In order of riskiest first:

    i. Credit card receivables
    ii. Sub-prime mortgage backed securities
    iii. Aircraft leases
    iv. Tax liens

    Anyone else agree / disagree?

    In the know how Reply
  2. Is this CFA level 1 ?

  3. Answer to q14
    That depends on price

  4. 15. 4 – run scoring double.

  5. 12.depends on the bottom line after considering elasticity of demand, costs and other factors
    both in short term and long-term. if i select price i would consider effects on demand and if i select increase in production i would consider the costs associated with increase in production.
    Bottom line which ever gives a better return and benefits is the best choice.

  6. Question 13 answer is wrong. Changing envelopes won’t increase the expectation.

  7. Answer to #15, in preference order:
    4. Hitting a double and scoring the runner who was on second base.
    Why? No downside, and you capture a realised gain.
    3. Sacrifice bunting a runner from second to third.
    Why? You do lose an out, but you raise the probability of scoring, and the act itself implies a situation of allowing your team to go from a losing position to a breakeven position, or gain, near the end of the game.
    2. Completing an un-assisted double play.
    Why? Two outta 3 ain’t bad. And that’s without much effort expended.
    1. Hitting a lead-off double.
    Why? It puts you in a good spot (scoring position), but it does take some energy.
    5. As a pitcher striking out the other team’s best hitter.
    Why? Well, it feels good, and probably does help, but your teammates and the fans will be bored.

  8. 12- Two companies in the same industry. Company A raises price and Company B increases production capacity. Which one is better?

    According to my humble opinion, Company B is better, by refering the law of demand theory in economics

    The Law of Demand:

    (1). The law of demand states that when the price of a good rises, the amount demanded falls, and when the price falls, the amount demanded rises.
    (2). The law of demand states that, if all other factors remain equal, the higher the price of a good, the smaller is the quantity demanded; and the lower the price of a good, the greater is the quantity demanded.

    therefore, increasing of production mean giving chance to middle and lower people to buy/spend. whereas, increasing the price means satisfying selected/target group.

  9. What is CAR.?

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