Summer Investment Banking Analyst Interview Questions | Glassdoor

# Summer Investment Banking Analyst Interview Questions

326

Summer investment banking analyst interview questions shared by candidates

## Top Interview Questions

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### Investment Banking Summer Analyst at J.P. Morgan was asked...

Jul 11, 2012
 What are the methods of valuing a company? 1 AnswerIt's DCF(Discounted casfhflow) & Relative method, where FCFE(Free cash flow to Equity) is vital for equity shareholders & FCFF(Free cash flow to Firm) is vital for the company.

### Investment Banking Summer Analyst at Bank of America was asked...

Feb 7, 2014
 If someone offered you \$1000 today or paid out at \$100 a month over the next ten months, which would you take?3 AnswersThe quantitative way to answer this is the perpetuity growth formula. You would take the monthly payments. Don't really know why, that is what the interviewer told me.The answer should be the \$1000...\$1000 today is worth more than \$1000 ten months from now or \$100 every month for 10 months due to the time value of money.Money loses value over time...

### Investment Banking Summer Analyst at Citi was asked...

Mar 9, 2015
 What is valuation1 AnswerHow much a company is worth

Feb 14, 2012

### Investment Banking Summer Analyst at SunTrust Robinson Humphrey was asked...

Dec 19, 2013
 There is a machine that makes 8 balls. All of them are identical, except for one ball that weighs slightly more (if you held the ball, you wouldn't be able to tell the difference). You have a two-pan, balance scale that you can only use twice. How would you find the heavier ball?1 AnswerDon't do 4 and 4. It doesn't work. Take 6 balls and split them into 3 and 3 on the scale. If it is balanced, you know it is one of the leftover two balls. Use the scale (2nd use) to see which is heavier. If a group of three balls (from 1st use) weighs more, split them into 2 and 1. Weigh the 2 (2nd use). If they are balanced, it is the third one. If not, the scale will show which is heavier.

### Investment Banking Summer Analyst at PNC Financial Services Group was asked...

Oct 7, 2013
 Explain your understanding of the 2007-08 financial crisis. What were the key factors at play and what do you think could have been done to avoid it?1 AnswerI talked a bit about how mortgage defaults and ambiguities in the structuring of synthetic CDOs caused concern about the value of collateral used for repo transactions which led to higher haircuts and created a liquidity death spiral... I think he liked that I used the phrase liquidity death spiral. For the second part I kind of copped out and said something about hindsight bias and if the smartest people in the world didn't foresee a systemic meltdown of the financial industry there probably was no way to avoid it.

### Summer Analyst - Investment Banking at BMO Capital Markets was asked...

Jan 12, 2012
 What is he current GDP growth rate of the Russian economy?1 AnswerAsked by the VP of M&A. This was the question that most threw me off during the entire process

### Investment Banking Analyst Summer at Wells Fargo was asked...

Feb 12, 2011
 How do you value a firm?1 AnswerTwo ways: comparables and DCF

### Investment Banking Summer Analyst at Jefferies was asked...

Oct 1, 2012
 How is BS different from two other accounting statements?1 AnswerIt's not a duration of time. It's a snapshot

### Investment Banking Summer Analyst at Lazard was asked...

Mar 22, 2013
 Which one has a higher discount rate, DCF or LBO?2 AnswersLBO has a higher discount rate. You are paying less equity upfront, so if everything goes well, you should be generating more equity.Actually using the same inputs both would give the same result, though the LBO mechanic is usually used for projects involving higher risk and, therefore, have higher cost of capital
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