The following is an excerpt from the Interviews chapter of our insider's guide
We use these questions to interview associates in the Blyth Fund, Stanford’s student-managed, 6-figure portfolio. Associates need to have a basic understanding of stock analysis and financial markets. The questions are mostly definition-oriented and test how well you know basic concepts. Finance interviewers are likely to ask these types of questions to competitive freshmen and sophomores.
- What are your greatest strengths?
- Why are you applying for this position?
- What is your greatest weakness?
- Tell us about at time when you had to think on your feet.
- What is a recent book you read?
- Teach me something.
- What was your greatest failure and what did you learn from it?
- Tell me about your previous finance experience.
- Why should we hire you?
At this level, you’re only expected to know what the below “definition terms” are, as opposed to having to explain their role in valuation and their underlying relationships. Wikipedia can be a great resource for some of these questions.
- Walk me through the 3 financial statements.
- Walk me through the income statement.
- What’s the difference between revenue and net income?
- What is EBITDA?
- What is the basic balance sheet formula?
- How is the cash flow statement organized?
- What is working capital?
- What is the P/E ratio?
- What is a mutual fund?
- What is an option?
- What is a bond?
- What is the relationship between a bond’s price and yield and why?
- What is an ETF?
- Where is the Dow at?
- Where is the S&P at?
- Tell me about a stock you follow, where its price is today and what its price was yesterday.
- Tell me about a recent article you read in the paper and how you would make a trade off of that article.
- Pitch me a stock.
- Pitch me another stock.
- What are some points that refute the pitch you just made?
- What stocks and market sectors do you follow?
- Teach me about how to analyze investments in XYZ sector.
- Where do you see markets going next year?
- How does the Fed conduct monetary policy?
- What is the Federal Fund’s rate?
- If interest rates rise, what does that imply for the future of the economy?
- What happens to American currency when inflation rises?
- What happens to money supply when interest rates rise?
If you can readily answer these questions, you should be able to handle anything your investment banking interviewer will ask you.