banking case study questions and answers pdf

47 case interview examples (from McKinsey, BCG, Bain, etc.)

Case interview examples - McKinsey, BCG, Bain, etc.

One of the best ways to prepare for case interviews at firms like McKinsey, BCG, or Bain, is by studying case interview examples.

There are a lot of free sample cases out there, but it's really hard to know where to start. So in this article, we have listed all the best free case examples available, in one place.

The below list of resources includes interactive case interview samples provided by consulting firms, video case interview demonstrations, case books, and materials developed by the team here at IGotAnOffer. Let's continue to the list.

McKinsey examples
BCG examples
Bain examples
Deloitte examples
Other firms' examples
Case books from consulting clubs
Case interview preparation

Click here to practise 1-on-1 with MBB ex-interviewers

1. mckinsey case interview examples.

Beautify case interview (McKinsey website)
Diconsa case interview (McKinsey website)
Electro-light case interview (McKinsey website)
GlobaPharm case interview (McKinsey website)
National Education case interview (McKinsey website)
Talbot Trucks case interview (McKinsey website)
Shops Corporation case interview (McKinsey website)
Conservation Forever case interview (McKinsey website)
McKinsey case interview guide (by IGotAnOffer)
McKinsey live case interview extract (by IGotAnOffer) - See below

2. BCG case interview examples

Foods Inc and GenCo case samples (BCG website)
Chateau Boomerang written case interview (BCG website)
BCG case interview guide (by IGotAnOffer)
Written cases guide (by IGotAnOffer)
BCG live case interview with notes (by IGotAnOffer)
BCG mock case interview with ex-BCG associate director - Public sector case (by IGotAnOffer)
BCG mock case interview: Revenue problem case (by IGotAnOffer) - See below

3. Bain case interview examples

CoffeeCo practice case (Bain website)
FashionCo practice case (Bain website)
Associate Consultant mock interview video (Bain website)
Consultant mock interview video (Bain website)
Written case interview tips (Bain website)
Bain case interview guide (by IGotAnOffer)
Digital transformation case with ex-Bain consultant
Bain case mock interview with ex-Bain manager (below)

4. Deloitte case interview examples

Engagement Strategy practice case (Deloitte website)
Recreation Unlimited practice case (Deloitte website)
Strategic Vision practice case (Deloitte website)
Retail Strategy practice case (Deloitte website)
Finance Strategy practice case (Deloitte website)
Talent Management practice case (Deloitte website)
Enterprise Resource Management practice case (Deloitte website)
Footloose written case (by Deloitte)
Deloitte case interview guide (by IGotAnOffer)

5. Accenture case interview examples

Case interview workbook (by Accenture)
Accenture case interview guide (by IGotAnOffer)

6. OC&C case interview examples

Leisure Club case example (by OC&C)
Imported Spirits case example (by OC&C)

7. Oliver Wyman case interview examples

Wumbleworld case sample (Oliver Wyman website)
Aqualine case sample (Oliver Wyman website)
Oliver Wyman case interview guide (by IGotAnOffer)

8. A.T. Kearney case interview examples

Promotion planning case question (A.T. Kearney website)
Consulting case book and examples (by A.T. Kearney)
AT Kearney case interview guide (by IGotAnOffer)

9. Strategy& / PWC case interview examples

Presentation overview with sample questions (by Strategy& / PWC)
Strategy& / PWC case interview guide (by IGotAnOffer)

10. L.E.K. Consulting case interview examples

Case interview example video walkthrough (L.E.K. website)
Market sizing case example video walkthrough (L.E.K. website)

11. Roland Berger case interview examples

Transit oriented development case webinar part 1 (Roland Berger website)
Transit oriented development case webinar part 2 (Roland Berger website)
3D printed hip implants case webinar part 1 (Roland Berger website)
3D printed hip implants case webinar part 2 (Roland Berger website)
Roland Berger case interview guide (by IGotAnOffer)

12. Capital One case interview examples

Case interview example video walkthrough (Capital One website)
Capital One case interview guide (by IGotAnOffer)

13. Consulting clubs case interview examples

Berkeley case book (2006)
Columbia case book (2006)
Darden case book (2012)
Darden case book (2018)
Duke case book (2010)
Duke case book (2014)
ESADE case book (2011)
Goizueta case book (2006)
Illinois case book (2015)
LBS case book (2006)
MIT case book (2001)
Notre Dame case book (2017)
Ross case book (2010)
Wharton case book (2010)

Practice with experts

Using case interview examples is a key part of your interview preparation, but it isn’t enough.

At some point you’ll want to practise with friends or family who can give some useful feedback. However, if you really want the best possible preparation for your case interview, you'll also want to work with ex-consultants who have experience running interviews at McKinsey, Bain, BCG, etc.

If you know anyone who fits that description, fantastic! But for most of us, it's tough to find the right connections to make this happen. And it might also be difficult to practice multiple hours with that person unless you know them really well.

Here's the good news. We've already made the connections for you. We’ve created a coaching service where you can do mock case interviews 1-on-1 with ex-interviewers from MBB firms . Start scheduling sessions today!

The IGotAnOffer team

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Private Equity Interviews 101: How to Win Offers

If you're new here, please click here to get my FREE 57-page investment banking recruiting guide - plus, get weekly updates so that you can break into investment banking . Thanks for visiting!

Private equity interviews can be challenging, but for most candidates, winning interviews is much tougher than succeeding in those interviews.

You do not need to be a math genius or a gifted speaker; you just need to understand the recruiting process and basic arithmetic.

Still, there is more to PE interviews than “2 + 2 = 4,” so let’s take a detailed look at the process:

How to Network and Win Private Equity Interviews

The Private Equity recruiting process differs dramatically depending on your current job and location.

Here are the two extremes:

Investment Banking Analyst at a Bulge Bracket or Elite Boutique in New York: The process will be highly structured, and interviews will finish at warp speed. In some ways, your bank, group, and academic background matter more than your skill set or deal experience. This one is known as the “on-cycle” process.
Non-Banker in Another Part of the U.S. or World: The process will be far less structured, it may extend over many months, and your skill set and deal/client experience will matter a lot more. This one is known as the “off-cycle” process.

If you’re in between these categories, the process will also be in between these extremes.

For example, if you’re at a smaller bank in NY, you may complete some on-cycle interviews, but you will almost certainly also go through the off-cycle process at smaller firms.

If you’re in London, there will also be a mix of on-cycle and off-cycle processes, but they tend to start later and move more slowly than the ones in NY.

We have covered PE recruiting previously ( overall process and what to expect in the on-cycle process ), so I am not going to repeat everything here.

Interviews in both on-cycle and off-cycle processes test similar topics , but the importance of each topic varies.

The timing of interviews and start dates, assuming you win offers, also differs.

The Overall Private Equity Interview Process

Regardless of whether you recruit in on-cycle or off-cycle processes, or a combination of both, almost all PE interviews have the following characteristics in common:

Multiple Rounds: You’ll almost always go through at least 2-3 rounds of interviews (and sometimes many more!) where you speak with junior to senior professionals at the firm.
Topics Tested: You’ll have to answer fit/background questions, technical questions, deal/client experience questions, questions about the firm’s strategies and portfolio, market/industry questions, and complete case studies and modeling tests.

The differences are as follows:

Timing and Time Frame: If you’re at a BB/EB bank in NY, and you interview with mega-funds, the process starts and finishes within several months of your start date at the bank (!), and it moves up earlier each year. Interviews at the largest firms start and finish in 24-48 hours, with upper-middle-market and middle-market firms beginning after that.

By contrast, interviews start later at smaller PE firms, and the entire process may last for several weeks up to several months.

Importance of Topics Tested: At large funds and in the on-cycle process, you need to complete modeling tests quickly and accurately and spin your pitches and early-stage deals into sounding like real deals; at smaller funds and in off-cycle interviews, the reasoning behind your case studies/modeling tests and your real experience with clients and deals matter more.

Firm-specific knowledge and fitting your investment recommendations to the firm’s strategies are also more important.

Start Date: You interview far in advance if you complete the on-cycle process, and if you win an offer, you might start 1.5 – 2.0 years later. With the off-cycle process, you start right away or soon after you win the offer.

Private Equity Interview Topics

There is not necessarily a correlation between the stage of interviews and the topics that will come up.

You could easily get technical questions early on, and you’ll receive fit/background and deal experience questions throughout the process.

Case studies and modeling tests tend to come up later in the process because PE firms don’t want to spend time administering them until you’ve proven yourself in previous rounds.

However, there are exceptions even to that rule: For example, many funds in London start the process with modeling tests because there’s no point interviewing if you can’t model.

Here’s what to expect on each major topic:

Fit/Background Questions: “Why Private Equity?”

The usual questions about “ Why private equity ,” your story , your strengths/weaknesses , and ability to work in a team will come up, and you need answers for them.

We have covered these in previous articles, so I’ve linked to them above rather than repeating the tips here.

Since on-cycle recruiting takes place at warp speed, you’ll have to draw on your internship experience to come up with stories for these questions, and you’ll have to act as if PE was your goal all along.

By contrast, if you’re interviewing for off-cycle roles, you can use more of your current work experience to answer these questions.

While these questions will always come up, they tend to be less important than in IB interviews because:

In on-cycle processes, it’s tough to differentiate yourself – everyone else also did multiple finance internships and just started their IB roles.
They care more about your deal experience, whether real or exaggerated, in both types of interviews.

Technical Questions For PE

The topics here are similar to the ones in IB interviews: Accounting, equity value and enterprise value , valuation/DCF, merger models, and LBO models.

If you’re in banking, you should know these topics like the back of your hand.

And if you’re not in banking, you need to learn these topics ASAP because firms will not be forgiving.

There are a few differences compared with banking interviews:

Technical questions tend to be framed in the context of your deal experience – instead of asking generic questions about the WACC formula , they might ask how you calculated it in one specific deal.
More critical thinking is required. Instead of asking you to walk through the financial statements when Depreciation changes, they might describe companies with different business models and ask how the financial statements and valuation would differ.
They focus more on LBO models, quick IRR math , and your ability to judge deals quickly.

Most interviewers use technical questions to weed out candidates , so poor technical knowledge will hurt your chances, but exceptional knowledge won’t necessarily get you an offer.

Talking About Deal/Client Experience

This category is huge, and it presents different challenges depending on your background.

If you’re an Analyst at a large bank in New York, and you’re going through on-cycle recruiting, the key challenge will be spinning your pitches and early-stage deals into sounding like actual deals.

If you’re at a smaller bank, and you’re going through off-cycle recruiting, the key challenge will be demonstrating your ability to lead, manage, and close deals .

And if you’re not in investment banking, the key challenge will be spinning your experience into sounding like IB-style deals.

Regardless of your category, you’ll need to know the numbers for each deal or project you present, and you’ll need a strong “investor’s view” of each one.

That’s quite a bit to memorize, so you should plan to present, at most, 2-3 deals or projects.

You can create an outline for each one with these points:

The company’s industry, approximate revenue/EBITDA, and multiples (or, for non-deals, estimated costs and benefits).
Whether or not you would invest in the company’s equity/debt or acquire it (or, for non-deals, whether or not you’d pursue the project).
The qualitative and quantitative factors that support your view.
The key risk factors and how you might mitigate them.

If you just started working, pick 1-2 of your pitches and pretend that they have progressed beyond pitches into early-stage deals.

Use Capital IQ or Internet research to generate potential buyers or investors, and use the company-provided pitch materials to come up with your projections for the potential stumbling blocks in the transaction.

For your investment recommendation, imagine that each deal is a potential LBO, and build a quick, simple model to determine the rough numbers, such as the IRR in the baseline and downside cases.

For the risk factors, reverse each model assumption (such as the company’s revenue growth and margins) and explain why your numbers might be wrong.

If you’re in the second or third categories above – you need to show evidence of managing/closing deals or evidence of working on IB-style deals – you should still follow these steps.

But you need to highlight your unique contributions to each deal, such as a mistake you found, a suggestion you made that helped move the financing forward, or a buyer you thought of that ended up making an offer for the seller.

If you’re coming in with non-IB experience, such as internal consulting , still use the same framework but point out how each project you worked on was like a deal.

You had to win buy-in from different parties, get information from groups at the company, and justify your proposals by pointing to the numbers and qualitative factors and addressing the risk factors.

Firm Knowledge

Understanding the firm’s investment strategies, portfolio, and exits is very important at smaller firms and in off-cycle processes, and less important in on-cycle interviews at mega-funds.

If you have Capital IQ access, use it to look up the firm.

If not, go to the firm’s website and do extensive Google searches to find the information.

Finding this information should not be difficult, but the tricky point is that firms won’t necessarily evaluate your knowledge by directly asking about it.

Instead, if they give you a take-home case study, they might judge your responses based on how well your investment thesis lines up with theirs.

For example, if the firm makes offline retailers more efficient via cost cuts and store divestitures, you should not present an investment thesis based on overseas expansion or roll-ups of smaller stores.

If they ask for an investor’s view of one of your deals, they might judge your answer based on your ability to frame the deal from their point of view.

For example, if the firm completes roll-ups in fragmented industries, you should not look at a standard M&A deal you worked on and say that you’d acquire the company because the IRR is between XX% and YY% in all scenarios.

Instead, you should point out that with several roll-ups, the IRR would be between XX% and YY%, and even in a downside case without these roll-ups, the IRR would still be at least ZZ%, so you’d pursue the deal.

Market/Industry

In theory, private equity firms should care about your ability to find promising markets or industries.

In practice, open-ended questions such as “Which industry would you invest in?” are unlikely to come up in traditional PE interviews.

If they do come up, they’ll be in response to your deal discussions, and the interviewer will ask you to explain the upsides and downsides of your company’s industry.

These questions are more likely in growth equity and venture capital interviews, so you shouldn’t spend too much time on them if your goal is traditional PE (for more on these fields, see our coverage of venture capital interview questions and the venture capital case study ).

And even if you are interviewing for growth equity or VC roles, you can save time by linking your industry recommendations to your deal experience.

Case Studies and Modeling Tests

You will almost always have to complete a case study or modeling test in PE interviews, but the types of tests span a wide range.

Here are the six most common ones, ranked by rough frequency:

Type #1: “Mental” Paper LBO

This one is closer to an extended technical question than a traditional case study.

To answer these questions, you need to know how to approximate IRR, and you need practice doing the mental math.

The interviewer might ask something like, “A PE firm acquires a $150 EBITDA company for a 10x multiple using 60% Debt. The company’s EBITDA increases to $200 by Year 3, $225 by Year 4, and $250 by Year 5, and it pays off all its Debt by Year 3.

The PE firm sells its stake evenly over Years 3 – 5 at a 10x EBITDA multiple. What’s the approximate IRR?”

Here, the Purchase Enterprise Value is $1.5 billion, and the PE firm contributes 40% * $1.5 billion = $600 million of Investor Equity.

The “average” amount of proceeds is $225 * 10 = $2,250, and the “average” Exit Year is Year 4 (no need to do the full math – think about the numbers – and all the Debt is gone).

So, the PE firm earns $2,250 / $600 = 3.75x over 4 years. Earning 3x in 3 years is a ~45% IRR, so we’d expect the IRR of a 3.75x multiple in 4 years to be a bit less than that.

To approximate a 4x scenario, we could take 300%, divide by 4 years, and multiply by ~55% to account for compounding.

That’s ~41%, and the actual IRR should be a bit lower because it’s a 3.75x multiple rather than a 4.00x multiple.

In Excel, the IRR is just under 40%.

Type #2: Written Paper LBO

The idea is similar, but the numbers are more involved because you can write them down, and you might have 30 minutes to come up with an answer.

You can get a full example of a paper LBO test, including the detailed solutions, here .

You can also check out our simple LBO model tutorial to understand the ropes.

With these case studies, you need to start with the end in mind (i.e., what multiple do you need for an IRR of XX%) and round heavily so you can do the math.

Type #3: 1-3-Hour On-Site or Emailed LBO Model

These case studies are the most common in on-cycle interviews because PE firms want to finish quickly.

And the best way to do that is to give all the candidates the same partially-completed template and ask them to finish it.

You may have to build the model from scratch, but it’s not that likely because doing so defeats the purpose of this test: efficiency.

You’ll almost always receive several pages of instructions and an Excel file, and you’ll have to answer a few questions at the end.

The complexity varies; if it’s a 1-hour test, you probably won’t even build a full 3-statement model .

They might also ask you to use a cash-free debt-free basis or a working capital adjustment to tweak the Sources & Uses slightly.

If it is a 3-hour test, a 3-statement model is more likely (the other parts of the model will be simpler in this case).

Here’s a free example of a timed LBO modeling test ; we have many other examples in the IB Interview Guide and Core Financial Modeling course .

IB Interview Guide

Land investment banking offers with 578+ pages of detailed tutorials, templates and sample answers, quizzes, and 17 Excel-based case studies.

Type #4: Take-Home LBO Model and Presentation

These case studies are open-ended, and in most cases, you will not get a template to complete.

The most common prompts are:

Build a model and make an investment recommendation for Portfolio Company X, Former Portfolio Company Y, or Potential Portfolio Company Z.
Pick any company you’re interested in, build a model, and make an investment recommendation.

With these case studies, you must fit your recommendation to the firm’s strategy rather than building a needlessly complex model.

You might have 3-7 days to complete this type of case study and present your findings.

You might be tempted to use that time to build a complex LBO model, but that’s a mistake for three reasons:

The smaller firms that give open-ended case studies tend not to use that much financial engineering.
No one will have time to review or appreciate your work.
Your time would be better spent on industry research and coming up with a sold investment thesis, risk factors, and mitigants.

If you want an example of an open-ended exam like this, see our private equity case study article and follow the video walkthrough or article text.

Your model could be shorter, and your presentation could certainly be shorter, but this is a good example of what to target if you have more time/resources.

Type #5: 3-Statement/Growth Equity Model

At operationally-focused PE firms, growth equity firms, and PE firms in emerging markets such as Brazil , 3-statement projection modeling tests are more common.

The Atlassian case study is a good example of this one, but I would change a few parts of it (we ignored Equity Value vs. Enterprise Value for simplicity, but that was a poor decision).

Also, you’ll never have to answer as many detailed questions as we did in that example.

If you think about it, a 3-statement model is just an LBO model without debt repayment – and the returns are based on multiple expansion, EBITDA growth, and cash generation rather than debt paydown .

You can easily practice these case studies by picking companies you’re interested in, downloading their statements, projecting them, and calculating the IRR and multiples.

Type #6: Consulting-Style Case Study

Finally, at some operationally-focused PE firms, you could also get management consulting-style case studies, where the goal is to advise a company on an expansion strategy, a cost-cutting initiative, or pricing for a new product.

We do not teach this type of case study, so check out consulting-related sites for examples and exercises.

And keep in mind that this one is only relevant at certain types of firms; you’re highly unlikely to receive a consulting-style case study in standard PE interviews.

A Final Word On Case Studies

I’ve devoted a lot of space to case studies, but they are not as important as you might think.

In on-cycle processes, they tend to be a “check the checkbox” item: Interviewers use them to verify that you can model, but you won’t stand out by using fancy Excel tricks.

Arguably, they matter more in off-cycle interviews since you can present unique ideas more easily and demonstrate your communication skills in the process .

What NOT to Worry About In PE Interviews

The topics above may seem overwhelming, so it’s worth pointing out what you do not need to know for interviews.

First, skip super-complex models.

As a specific example, the LBO models on Macabacus are overkill; they’re way too complicated for interviews or even the job itself.

You should aim for Excel files with 100-300 rows, not 1,000+ rows, and skip points like circular references unless they specifically ask for them (for more, see our tutorial on how to remove circular references in Excel )

Next, skip brain teasers; if an interviewer asks them, you should drop discussions with the firm.

Finally, you don’t need to know about the history of the private equity industry or much about PE fund economics beyond the basics.

Your time is better spent learning about a firm’s specific strategy and portfolio.

PE Interview X-Factor(s)

Besides the topics above, competitive tension can make a huge difference in interviews.

If you tell Firm X that you’ve already received an offer from Firm Y, Firm X will immediately become far more likely to give you an offer as well.

Even at the networking stage, competitive tension helps because you always want to tell recruiters that you’re also speaking with Similar Firms A, B, and C.

Also, leverage your group alumni and the 2 nd and 3 rd -year Analysts.

You can read endless articles online about interview prep, but nothing beats real-life conversations with others who have been through the process.

These alumni and older Analysts will also have example case studies they completed, and they can explain how to spin your deal experience effectively.

PE Interview Preparation

The #1 mistake in PE interviews is to focus excessively on modeling tests and technical questions and neglect your deal discussions.

You can avoid this, or at least resist the temptation, by turning your deals into case studies.

If you follow my advice to create simplified LBO models for your deals, you can combine the two topics and get modeling practice while you’re preparing your “investor’s views.”

If you’re working full-time in banking, use your downtime in between tasks to do this , outline your story , and review technical questions.

If you only have 10-15-minute intervals of downtime, break case studies into smaller chunks and aim to finish a specific part in each period.

Finally, start preparing before your full-time job begins .

You’ll have far more time before you start working, and you should use that time to tip the odds in your favor.

The Ugly Truth About PE Interviews

You can read articles like this one, memorize PE interview guides, and get help from dozens of bank/group alumni, but much of the process is still outside of your control.

For example, if you’re in a group like ECM or DCM , it will be tough to win on-cycle interviews at large firms and convert them into offers no matter what you do.

If the mega-funds decide to kick off recruiting one day after you start your full-time job in August, and you’re not prepared, too bad.

If you went to a non-target school and earned a 3.5 GPA, you’ll be at a disadvantage next to candidates from Princeton with 3.9 GPAs no matter what you do.

So, start early and prepare as much as you can… but if you don’t receive an offer, don’t assume it’s because you made a major mistake.

So You Get An Offer: What Next?

If you do receive an offer, you could accept it on the spot, or, if you’re speaking with other firms, you could shop it around and use it to win offers elsewhere.

If you’re not in active discussions with other firms, you’re crazy if you do not accept the offer right away.

If You Get No Offer: What Next?

If you don’t get an offer, follow up with your interviewers, ask for feedback, and ask for referrals to other firms that might be hiring.

If you did reasonably well but came up short in a few areas, you could easily get referrals elsewhere .

If you did not receive an offer because of something that you cannot fix, such as your undergraduate GPA or your previous work experience, you might have to consider other options, such as a Master’s, MBA, or another job first.

But if it was something fixable, you could take another pass at recruiting or keep networking with smaller firms.

To PE Or Not to PE?

That is the question.

And the answer is that if you have the right background, you understand the process, and you start preparing far in advance, you can get into the industry and win a private equity career .

And if not, there are other options, even if you’re an older candidate .

You may not reach the promised land, but at least you can blame it on someone else.

Additional Reading

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street . In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

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49 thoughts on “ Private Equity Interviews 101: How to Win Offers ”

Brian, What about personality tests? What is their importance in the overall hiring process eg if you get them as the last stage?

They’re not that important, and even if you do get them, you can’t really “prepare” in any reasonable way (barring a brain transplant to replace your personality and make it more suitable for the firm). It’s also highly unusual to get one in the final stage – a firm doing that is probably just paranoid that you are secretly a serial killer and they want to rule out that possibility.

Hey- for the Fromageries Bel case study, can’t quite make sense of the Tier 4 management incentive returns, what’s the calculation for each tier? Would think it’s Tier 2 less tier 1 * tier 1 marginal profit

Tier 4 is based on a percentage of all profits *above* a 2.5x equity multiple. Each tier below it is based on a percentage of profits between specific multiples, which correspond to specific EUR proceeds amounts.

I have an accounting background (CPA & several years removed from school) and a small amount of finance experience through internships. I’m interviewing for a PE analyst position and managed to get through the first round of interviews. The firm itself doesnt just hire guys with a few years of banking, their team is very diverse with some backgrounds similar to mine.

The first round interview was a mix of technical questions plus a lot about myself and my experience. No behavioral questions. The first round was with an associate for 30 minutes, the second round is an hour with a partner. I managed to answer a lot of the questions about LBO models and what types of companies are good LBO candidates. Thanks to your website for that.

Any advice for a second round interview for a guy like me who doesnt have deal making experience or much experience in finance? Will the subsequent interviews after the first round be more technical-based questions? Or do they lean more on technical questions in round 1 to weed out candidates?

They will usually become more fit-based if they’ve already asked a lot of technical questions in earlier rounds. I would focus on your story and answers to the Why PE / Why This Firm / Are you sure you want to switch?-type questions.

Is it likely too difficult to access the on-cycle process from the CLT office of an In-Between-a-Bank that it would make more sense to focus one’s energy on the MM/LMM? Is the new era of Zoom making geography/distance less of a factor or is the perceived prestige of NY still an obstacle?

Location is somewhat less of a factor now, but it still matters, and working from home will not continue indefinitely into the future. It will be very difficult to participate in on-cycle recruiting at the mega-funds if you’re working in Charlotte at Wells Fargo if that’s your question, but plenty of MM funds are realistic.

What are some of the larger funds that you would consider realistic?

There are dozens of funds out there (it’s not like bulge bracket banks or mega-fund PE firms where there’s only a defined set of 5-10), so I can’t really give you a specific answer. My recommendation would be to look up people who worked at WF on LinkedIn and see the types of funds they are now working at.

I remember I saw a video of yours (might have been YouTube) where you explained the PE process. You talked about do pe firms really add value and then you went over how when a pe firm buys a company, they do a little “trick” where they create a shell company to acquire the target so the debt isn’t on the pe firms books. I’ve been looking all over for this video. Do you know which video I’m referring to?

Yes, that is no longer in video form. It’s still in the written LBO guide but the video from the old course was removed because it was way too long and boring for a video and was better explained in text.

Hi Brian, can you elaborate more on ‘Understanding the firm’s investment strategies, portfolio, and exits’ when you talk about smaller firm and off-cycle processes, simliar point came up under *Type 5*: you must fit your recommendation to the firm’s strategy rather than building a needlessly complex model. What exactly should I pay attention on? I felt funds I checked their investment strategy descirption are pretty broad, and they invest in various type of deals, say even in one industry, they do different purchase range. Also, when talking about growth equity, you mentioned you can practice case by picking companies you’re interested in, downloading their statements, projecting them. What if they are not public companies, how can I get those information? Are you recommending only those companies with 20F available? Or can you just elaborate more on how can I follow your instruction? Thanks

All you can do is go off their website and possibly a Capital IQ description if you have access. See if they focus on growth, leverage for mature companies, operational improvements, or add-on acquisitions and pick something that fits one of those.

You can pick public companies for growth equity or find a public company that is similar to a private one the firm has.

Hey Brian! I have an interview with a family office for a private equity analyst position. The firm is small and not much about it online. I haven’t had much time to prepare as it was not an interview I was expecting. What would you say the most important elements to focus on are for the interview considering the time constraint? I am an undergrad, third year, second internship. (first internship was for a large construction/developer as project coordinator, not finance based)

Focus on your story, the firm’s portfolio companies and strategies, and a few investment ideas you have for specific sectors. Technical questions are fine, but you probably won’t have much time to prepare at the last minute.

How would PE interviews / Technical questions look like for straight out of undergrad PE role look like

e.g Blackstone internships, Goldman Merchant Banking internships etc

Similar to IB ones, with a focus on LBOs?

Largely the same, but less emphasis on deal experience and deal-related questions at the undergraduate level. They may ask slightly more questions on LBOs, but at the undergrad level, they assume you know very little, so questions will span a wide range of topics.

Have you written or seen similar articles on PE operating partner interviews?

No, sorry. There’s hardly any information on that level of interview online because you can’t really make an interview guide or other product to prepare for it, and most people at that level would need 1-on-1 coaching more than a guide. My guess is that they will focus almost exclusively on your past experience turning around and growing businesses and assess how well you can do it for their portfolio companies. They’re not going to give you LBO modeling tests or case studies.

“Next, skip brain teasers; if an interviewer asks them, you should drop discussions with the firm”

Could you please elaborate on this? Almost every IB interview includes brain teasers so I am wondering why a PE interview shouldn’t?

Brain teasers are not that common in IB interviews in most regions unless you count any math/accounting/finance question as a brain teaser. They are far more common in S&T, quant fund, and prop trading interviews.

The point of this statement is that it’s OK if an occasional brain teaser comes up, but if the interviewer asks you brain teasers for 30 minutes, which have exactly 0% correlation to the real work in PE, you should leave because it’s a sign that the people working at the firm are idiots who don’t know how to conduct proper interviews or test candidates.

This is helpful. I find myself at a fix, I do not think I have had the right exposure, although in a BB I support teams with standard materials in a particular industry group in M&A. However I have interviews with a top global PE next month. Any guidance on how should I prepare for it ?

Thanks in advance

Follow everything in this article… practice spinning/discussing your deals… practice LBO questions and simple case studies.

Brian – thank you for your concise and candid remarks. do you have any insights or advice for someone with 5yrs of BB ECM & DCM experience now at a top full-time MBA program looking to break in?

It’s going to be very difficult if you just have capital markets experience and you’re already in business school. You should probably move to an M&A or strong industry team at a large bank (BB or EB) after business school and then go into private equity from there. It’s tough, but still easier than trying to move into PE directly out of an MBA program with only capital markets experience.

My next interview will highly likely involve a statement/growth equity modeling case. I tried to find the Atlassian Case interview but i am unable to open the link.

Would it be possible to share an example case or more information on that topic?

Many thanks,

The Atlassian case study is all we have. I don’t know why you can’t open the files, but I just tried and they seemed to work. Maybe try again or use a different browser.

Hi M&I team,

I have an opportunity to interview for an Analyst level opening at a boutique PE fund. This is a shop that has just started operations so I am directly communicating with the Partner. I doubt they have any structured recruitment process at this stage of their existence. He asked me to send some written work (memos and spreadsheets) on any public listed co that demonstrates my understanding of investing (basic balance sheet analysis, ratio analysis, valuation multiples).

So I am just wondering what to do? Should I work on projections and prepare a DCF model or do something simpler? I’d really appreciate your guidance on this.

Thanks again for the amazing work you’ll have been doing!

Yes, just create simple projections, a simple valuation/DCF, and maybe a simple LBO model since it is a PE fund that intends to buy and sell companies.

Could you provide some advice for preparing interviews for principal investing role ?

Thank you in advance Laura

We don’t really focus on that, but the articles on private equity and funds of funds on this site might be helpful.

Just wanted to say thank you! After reading everything on this site including all the CV and interview material I have managed to transition from a second year engineering undergrad with no prior experience/spring weeks/insight days, into an intern at Aviva Investors (UK buy side) within the space of one year.

The information you have posted is invaluable and “breaking in” is definitely doable with the right mindset and appetite for rejections!

Thanks again.

Thanks! Congrats on your internship offer.

Hi Brian/Nicole – Im an Economics student from the UK in 3rd year out of a 4 year course at a semi-target college, with 2 finance internships done up until now(not FO). I plan on doing a Msc Finance when I finish and eventually break into IB or Sales/Trading (I know I still haven’t decided which one I really want more). Through a family friend I have an offer to do a short internship this summer in NY in a post-trade regulatory commission. As this isn’t actually sitting at a trading desk experience, or anything related to IB should I decide to go down that road, would this add genuine value to my CV ? How are internships in regulatory commissions looked at for students looking to break into sales/trading? Surely even having any NY Finance experience on the CV will add more substance over here in London when going for internships compared to the majority of UK students who don’t? Appreciate any advice on this matter, Thanks!

I don’t think it would help much because you already have 2 non-FO internships, and a regulatory internship would be yet another non-FO internship. If it’s your best option, you can take it, but you would be better off getting something closer to a real front-office role.

Hey Brian. I am graduating after this semester going into Management consulting (Deliote, AT Kearny, Accenture)but I’m hoping to make a switch into either IB or PE after a couple years. I have one search fund internship which was enough to get me a few 1st and second round ib/pe FT interviews but no offers.My plan is to get into the best online MSF program I can and switch into Finance once I’m done. Do you think, given how close I was to getting in my 1st try, a high GPA from a reputable MSF and good experience in consulting will be enough or should I try to somehow get an IB internship before I apply?

I think you will probably need another internship just before the MSF starts or while it is in progress, not necessarily in IB, but something closer to it. Otherwise you’ll get a lot of questions about why you went from the search fund to consulting.

Thanks. As far as my story is concerned, is it better to do another finance internship before consulting so it’s search fund->ib->consulting->MSF (or MBA not sure)? I only ask because I may be able to get on some m&a projects with the consulting firm and my story could be when exposed to those deals, I realized how big my passion for finance was and that’s when I decided to get my MSF and switch to IB.

No, I think that would make less sense because then you would have to explain why you went from IB to consulting… and are now trying to go back to IB. Saying that you got exposed to M&A deals during the consulting experience would be a better story (and you would still ideally pair it with a transaction-related internship before/during the MSF).

Got it, thanks!

Probably missing something here, but for the first example, where does the 300% and 55% come from?

300% = 4x multiple. If compounding did not exist, we could just say 300% / 4 = 75% annual return. Because of compounding, however, the actual return does not need to be 75% per year in order for us to earn 300% by the end of 4 years. Instead, it can be a fair amount less than that, and we’ll still end up with 300% at the end.

To estimate the impact of compounding, you can multiply this 300% / 4 figure by a “compounding factor,” which varies based on the multiple and time period, but which is around 55% for a 4x return over a standard holding period.

Do you mind explaining how you can estimate a “compounding factor” such as with the 55% here?

There’s no easy-to-calculate-using-mental-math way to get this for all scenarios, but you can memorize quick rules of thumb (based on actual numbers and looking at the ratios) for 3 and 5-year periods and extrapolate from there. I don’t really think it’s worth doing that in-depth, though, because you just have to be roughly correct with these answers.

Do you think you will do a hedge fund interview guide similar to the one you have here?

Potentially, yes, but it’s much harder to give general guidelines for HF interviews because they’re completely dependent on your investment pitches. Also, interest in HFs has declined over the years (we no longer receive as many questions about them).

On that mental paper LBO question, how is the company able to pay off 900 of debt by year 3? It sounds like proceeds from the sale will have to be used in order to fully pay off the debt because EBITDA alone only adds up to 525, and that’s assuming there’s no interest.

Favorable working capital… NOLs… asset sales… the Konami code or other cheat codes. The point is not the numbers but the thought process.

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banking case study questions and answers pdf

Investment Banking Case Study Examples – A Guide

If you are preparing for an investment banking interview, you’ll probably need to conquer a case study interview. because case studies are a very crucial component in the investment banking hiring process. particularly if you have never completed a case study before, that will be very challenging for you to get into the investment banking field. this article has covered everything you need to know about investment banking and potential investment banking case studies. there are also tips and practice investment banking case study questions with examples of how to resolve them..

Investment Banking Case Study Examples (1)

What is Investment Banking?

Investment banks are financial firms that perform a variety of tasks, including underwriting, assisting companies with the issuance of stock and debt securities through initial public offerings or fixed-priced offerings enabling mergers and acquisitions on both the buy side and sell side of the deal, corporate restructuring and many other tasks.

To efficiently complete these significant deals, a firm turns into an investment banker when it requires finance services. With some of the best benefits in the businesses, it is an extremely competitive industry.

How Does Investment Banking Work?

Investment banking offers services and serves as the middleman between businesses and investors and focuses mostly on shares and stock exchanges.

Investment banking services help big businesses and organizations in developing a successful investment strategy that includes accurate financial instrument valuation.

When a company conducts an IPO or initial public offering, an investment bank purchases the majority of the shares immediately on the firm’s behalf.

The investment bank, which is now serving as a stand-in for the company then sells these shares on the market. The investment bank improves the company’s revenue in this way while also making sure that all governing rules are observed.

The investment bank makes money by marking up the initial price of shares when selling them to investors, helping the organization in making the most profit possible from this activity.

If a circumstance in the market emerges where the stock becomes overpriced, the investment bank also runs the risk of losing money by selling the stock at a lower price.

An organization should assess its requirements and carefully consider all of its possibilities before seeking guidance from an investor banker. Before the company visits an investment bank, there are a few crucial considerations including the amount of capital being raised and the level of market competition. When the business has clarity in these areas, it can enlist the assistance of investment bankers to find new businesses to invest in.

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Benefits of Investment Banking

Investment banking assists big businesses in a variety of ways to make crucial financial decisions and make sure they maximize revenues. That’s the reason, Investment banks are a prevalent financial institution among these businesses and even governments.

Here Are Some of the Advantages of Investment Banking:

Investment banks effectively manage their client and provide them with the information they require regarding the advantage and disadvantages of investing their money in other businesses or organizations.
These banks serve as a bridge between the company and the investor, ensuring a rise in financial capital by helping in major financial transactions like mergers and acquisitions.
It conducts an in-depth analysis of the deal and project that will be undertaken by its customer to ensure that the client’s money is invested safely and helps to reduce the risks involved with the mentioned deal or project.

What is Investment Banking Case Study?

You must have solved case studies during your investment banking training.

Analyzing a business condition is done in case studies during investment banking interviews.

You would be provided with all the necessary data and have adequate time to examine broad case studies. There you would be asked for your opinion on business-related issues.

Your Task Includes,

Make the necessary deduction.
Investigate the matter, which is typically a client’s business.
Give suggestions for resolving the current issue along with an explanation.

Investment banking case studies are frequently used to evaluate a job candidate’s potential performance in real circumstances, where your interviewers would give you a problem and ask for a detailed recommendation.

By presenting them with a hypothetical scenario similar to those experiences while working in the field, your job is simply to analyze the scenario and give them justified reasons.

Case studies are typically presented at the end of the application process, most frequently at the final interview or during the assessment center.

The majority of questions in investment banking case studies revolve around acquisition, capital raising, or business growth.

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What Are the Types of Case Studies?

Take home investment banking case study.

You will probably receive the case in advance so you have more time to work on it before the assessment day.
In the case of take-home case studies, you are given a few days to work on them, complete your analysis, and showcase your recommendation to the bankers over a 30-45 minutes presentation.
It involves a much deeper analysis including merger/LBO modeling, company procedures, and valuation.

On the Spot or Blind Investment Banking Case Study

On the day of your assessment center, the case can be presented to you blindly with little time for preparation.
These are given to you on the day of your interview and within an hour or two you are supposed to present it on the spot.
The time split for this process would usually be 45-60 minutes of preparation, 10 minutes of presentation followed by a round of question and answer.
It would not involve such deep study.
Some case studies on investment banking may occasionally be given as a group task, where the employer will use this as an opportunity to examine the candidate’s analytical skills and teamwork qualities.

Why You Should Prepare for Investment Banking Case Study?

The theory behind these case studies is that because the qualification for various professions varies, bankers don’t trust the conventional method of interviewing applicants.

Case studies are preferred by banking recruiters as a better way to evaluate applicants because they show how you should perform in the workplace.

You don’t need to worry about whether your response is right or wrong in this situation because the interviewer is more interested in how the candidate thinks and how well they can use logic and analysis to come up with an innovative answer to the challenge at that time.

Investment banking case study writers aim to inspire applicants to come up with their ideas and apply critical thinking.

Candidates for these positions must have a variety of skills, but problem-solving ability is one of the most important.

Recruiters are interested in learning how you would approach difficult circumstances and use your intelligence, education, and professional experience to handle them successfully.

Additionally, candidates get an amazing chance to practice their other abilities including presentation, communication, and interpersonal skills.

These factors make case studies significantly more important than the other methods of evaluating applicants in the investment banking hiring process.

How to Prepare for Case Studies Before Assessment Day?

Read as much deal news as you can while preparing and going through the daily market and business news in popular publications.
Discover the many valuation methods, how they are calculated, and how they are evaluated then try out your calculations after watching YouTube videos or reading information on valuation methods.
You must prepare a structure using PowerPoint and Excel consistently, especially for modeling and valuation-based case studies.
Also, improve your familiarity with software like Microsoft Excel so that you can use spreadsheets effectively.
You should practice the kinds of questions you might get during your presentation.
Real case study interview questions used by banks might not be available to you.
But, knowing that you need to practice, consider contacting a colleague or friend, or mentor you know who has gone through case study rounds for the types of questions they were asked.

How to Solve It and Perform Well During Assessment Day?

To solve the case study, take an organized strategy.
Before making a conclusion or deciding how to solve the problem, carefully analyze the case and the questions.
Professionally prepare Excel and PowerPoint while modeling case studies.
Every assentation you make should be supported by solid logical arguments, and the first few points should address that case’s most important issues.
Even if is not necessary, it would be advantageous to have a specialized understanding of the industry being studied.
Do not beat around the bush as you have limited time and hence be precise as you speak.

Investment Banking Case Study Examples and Answers

The decision-making case and the financial modeling case are two main types of case studies used in investment banking assessments.

Modeling – Investment Banking Case Study

Modeling case studies are typically take-home tasks that require you to perform straightforward valuation and financial modeling.

So rather than being a case study, it is more of a modeling exam.

The investment banker gives an overview of creating models as well as developing a variety of methods for an in-depth and useful understanding of the subject.

The modeling case study will either use a simpler merger or leveraged buyout model or a free cash flow to the business valuation.

To assess whether the firms are overvalued or undervalued, you would be asked to examine their valuation multiples.

In most cases, you will be given a few days to finish your analysis. Then on the day of the interview, you must spend 30-45 minutes presenting your case to the bankers.

Because you will have more time to work on it, the analysis will be considerably more in-depth than in a client case or decision-making case study.

Evaluating Strategic Alternative: Case Study 1

To maximize shareholder value, a magazine publisher is deciding whether to sell, grow organically or make tiny “tuck-in” acquisitions. It is looking for an investment bank to assist it with its alternatives and has asked for a presentation from your company.

Given Materials:

They would provide you with a firm summary with financial statements and five-year forecasts, a ten-page market analysis with main competitors, minor acquisition candidates, and recent transactions.

First, go through everything to get a sense of the industry, where it’s going, and how much this firm is worth in comparison.
Complete a quick assessment using publicly available rivals and prior transactions and a DCF.
Evaluate the figures provided by the value, the company’s potential for organic growth, and the availability of suitable targets for acquisition.

Decide what to do, in most cases it is advisable to say “Sell” unless the industry is expanding rapidly (Above 10% annually) the company is completely undervalued, or these are acquisition candidates that will increase revenue or profit by at least 20-30%.

After you have come to a decision, you must prepare your presentation and decide what to tell the bankers.

If you are analyzing scenarios like this during a 30-minute presentation, choose 10 slides with 3-4 important themes each and attempt to spend 3-4 minutes on each slide.

If you choose to write “Sell the company”, consider the following steps in preparing a presentation:

List the three main reasons for recommending selling
Overview of the industry- Is it expanding? Falling off? Or Being Inactive?
Position of the company in the industry? Leader or Second level position? Or is it strong or weak?
What would organic growth look like in five to ten years? How much larger or more valuable would the company be?
Prospective tuck-in acquisition candidates
Why organic growth and acquisition are not the answers.
Why selling now will generate the most shareholder value
Show prior transactions and public comparable valuations
Display the DCF output and the sensitivity chart valuation
Summary- State again that the best course of action is to sell your company right away and that neither organic development nor the acquisition of smaller firms would increase your company’s valuation in five to ten years.

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Decision Making- Investment Banking Case Study

Case studies that include decision-making are more common than case studies that involve modeling.

In this kind of case study, the applicant is required to decide for their client and offer advice.

The client case study can center on locating financial sources or determining whether or not a proposed merger should go forward.

At the interview, you should be prepared for these questions. Because you will have a set amount of time in which to examine and present the case. You will be given a total of 45-60 minutes to prepare and beforehand 10 minutes presentation with a Q&A round.

Case Study 1

A customer owns her company fully and wants to release some liquidity while keeping a stake in it (Worth £400 million) what suggestions would you provide the client to get the best possible price?

Given Materials:

A corporate overview and details about the company’s performance over the last three years are provided.

Examine all financial information thoroughly and forecast the company’s organic development.

Consider the breakdown of the present valuation if you are provided with the relevant facts.

Think about the client’s industry and the expected trends for that market.

How does the valuation stack up against others in the field?
Is the current valuation backed up by reliable industry forecasts?
Given the slow development of the industry, would it be wise to give up more equity?
Is it expected that this industry will keep growing?

Consider present customer portfolios, projects, etc., while deciding whether any actions could be performed to boost the company’s value.

Think about suggestions for the client’s negotiation strategy:

How much equity should they be prepared to give up?
What number should the client choose as their actual reserve price, in your opinion?

Case Study 2

A publicly traded firm contacts you in the hope to raise money. Analysts’ expectations were met by recent profits and the latest financial report, but the company’s market values are lowest throughout the year. The management of the company has developed a project that it hopes would significantly boost EBIDTA and is looking to raise funding for it. What should the business do to raise the required capital?

Given material:

A summary of the business and its financial statements will be provided to you to prepare for this question.

You must think about whether the organization should raise debt or stock.

Think about the market capitalization, share count, and share price:

How would the company be affected in this environment if it issued fresh shares?
In terms of dilution of ownership, would equity financing be an appropriate option?
How would the effect currently differ from what it would be if the share price were back to normal?

Then examine the provided financial statements:

Would increasing debt be a better course of action if they are actually under management’s predictions?
How much they could possibly raise?
What potential problems could a debt increase bring about?
How could the cost of interest be reduced?

Prepare your presentation by organizing your ideas clearly and go through your questions and thought process to get at your recommendation.

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Potential Acquisition: Case Study 3

A software company is considering a large acquisition. It has chosen the company it wishes to acquire and has contacted a number of investment banks to obtain their thoughts on the transaction and how much they should pay. Based on these presentation, it will choose an advisor and decide what to do.

Two page summaries of the buyers and seller, each containing financial data as well as statistics and multiples for similar organization.

With a recommendation on whether to move forward with the acquisition and if so, how much to pay for the target, create five minute presentation.

For the very first, you should consider this two question to solve this,

Should they purchase that target business?
What price should they want for the target business?

For an example,

Let’s assume that the comparable companies are trading at EBITDA multiples that range from 4 to 8 times, with the median at 6 times and the 75th percentile at 7 times, respectively. You choose the 25th to 75th percentile range of 5x-7x and apply it to the target company’s $10 million EBITDA since the target company’s profit margins and revenue growth are comparable.

Therefore, the purchase price should range between $50 million and $70 million.

If you have access to a computer, you can also design a DSF, but if you are short of time, keep it straightforward and use multiples.

To answer the question “Should they buy?” take note of the following:

Will the buyer be able to purchase the seller with enough cash, debt, or stock issuances?
Will the vendor increase the buyer’s revenue and profit?
Will the buyer benefit from new consumers, new goods, new markets, or other kinds of benefits as a result of the seller’s acquisition?

After concluding these, you can complete your presentation.

Investment Banking Case Study: FAQs

Q. what is an investment banking case study in short terms.

By presenting candidates with a hypothetical scenario that is comparable to those they might face on the job, investment banking case studies are frequently used to evaluate how the candidate would function in real circumstances.

Q. Which skills are tested in investment banking case study interviews?

Candidates’ analytical and financial skills as well as problem-solving, presentation skills, critical thinking, and interpersonal skills are tested during investment banking interviews.

Q. Is there any way to practice investment banking case studies?

There are various tools, financial modeling online courses, and investment banking textbooks accessible to practice investment banking case studies. Additionally, there are certain career services offered at universities and institutions that provide investment banking programs with case studies.

Investment Banking Case Study: Conclusion

The opportunities to demonstrate your abilities and expertise to investment bankers are provided by investment banking case studies, which are a crucial component of an interview process.

We have covered some of the investment banking case study examples that will help you in preparation for an investment banking interview.

No doubt it is a very competitive yet tough field to break into but we hope, through this article you achieve the success ladder in the investment banking industry.

Author: Swati Varli

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Case Studies in Islamic Banking and Finance: Case Questions & Answers

What are the principles of Islamic banking and finance? Case Study 1.The Ijara Contract as a mode of Islamic Finance. Case Study 2. The Musharaka Contract as a mode of Islamic Finance. Case Study 3. The Diminishing Musharaka Contract as a mode of Islamic Finance. Case Study 4.1.The Mudaraba Contract as a mode of Islamic Finance. Case Study 4.2.The Mudaraba contracts with multiple financing options. Case Study 5. Murabaha, Musharaka, Ijara and Ijara Wa-Iktina. Case Study 6. Islamic Mortgages for Home Finance. Case Study 7. Sources of Finance for Islamic Banks: An Application of Profit and Loss Sharing. Case Study 8. Financial Statement Analysis for Islamic Banks. Case Study 9. Islamic Investment Prohibitions. Case Study 10. Issues involved in creating an Islamic bank within a western regulatory framework : the case of the Islamic Bank of Britain. Case Study 11. Leverage and Islamic Banking. Case Study 12. Impact of Loan Defaults on Islamic and Conventional Banks. A glossary of Islami...

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Rasem Kayed

ABD HAKIM ABD RAZAK

The raison d'être of this article is to supply basic insights on the origin and characteristics of the Islamic Banking system, its distinguishing features, and related contentious issues that have remained the subject of ongoing debates among Sharia' scholars and members of the academia. These were analyzed by referring to the principles of Muammalat (Islamic economic transaction), which are derived from the Holy Quran, Sunnah of Prophet Muhammad (p.b.u.h.), and Ijma' (consensus) of prominent Sharia' scholars. Contrary to the conventional banks, Islamic banks are required to operate according to the principles of Muammalat, which are identified as the avoidance of Riba', Gharar, Maysir, Hilah, and the promotion of ethical business practices such as justice, fairness and transparency. The 2008 global financial meltdown has created a unique awareness among banking consumers on the need of an alternative to complement the conventional banking system, which was viewed by financial scholars as suffering from a crisis of failed morality as a result of greed, exploitation, and corruption. Likewise, many may viewed that the Islamic Banking system is merely another attempt to capitalize on the pulling power of religion towards people, yet there are a number of interestingly unique features that accentuate it from the other banking alternatives. In essence, it is aspired that this article may assist fellow readers, especially those who are still new to this alternative financial system, in understanding and appreciating its unique features, and further stimulate future research in this field. Insha'Allah (God's willing).

Fakihah Azahari

ali abdullah murtaza

Financial Markets, Institutions and Instruments

Kabir Hassan

Islamic Economic Studies

Nazmira Othman

Islamic Finance

Simon Archer

IJARW Research Publication

Islamic System of Baking and Finance is based on the principles of Sharia Law and is applicable all over the Islamic economies. In this paper, the objective is the study the history of Islamic financial system, its origin, the concepts and terminologies used. The main differences with conventional banking system shall be highlighted. Regulatory bodies like Sharia Auditors and Sharia governing bodies shall also be discussed. The main focus would on discussing the main financial tools used in Islamic banking and the concepts behind those terminologies.

The Huffington Post

Mansur Masih

In recent years, Islamic finance has emerged as a potential tool for curbing poverty and financing development worldwide. This article offers an overview of some of the key issues as well as prospects of Islamic finance and banking in the current globalised era.

Salman Shaikh

9. Hematology Questions and Answers

Published: August 2013
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Chapter 9 presents multiple-choice, board review questions on hematology including anemia, myeloid malignancies, coagulation disorders, and lymphoid malignancies. Full explanations are provided with the correct answers.

Multiple Choice (choose the best answer)

Anemias and Myeloid Malignancies

1. A 67-year-old man is evaluated for exertional dyspnea. He recalls that 3 years ago he was told that he had anemia. In reviewing his records, you note that at that time his hemoglobin level was 9.5 g/dL and his hematocrit was 33% with an increased mean corpuscular volume (MCV); the remainder of his complete blood cell count was normal. On physical examination, he had conjunctival pallor, normal heart and lung findings, no lymphadenopathy, no hepatomegaly or splenomegaly, and no petechiae or ecchymoses. Diagnostic testing results are shown in Table 9.Q1 .

Which of the following is the most likely explanation for these findings?

Acute myeloid leukemia (AML)

Vitamin B 12 deficiency

Hemolytic anemia

Myelodysplastic syndrome (MDS)

Primary myelofibrosis

2. A 45-year-old woman is admitted to the surgical service with severe arterial insufficiency of the right second toe. She has no prior medical history and takes no medications. Physical examination findings are normal except for mild splenomegaly and signs of early gangrene in the right second toe. All pulses are full and equal throughout. Diagnostic testing results are shown in Table 9.Q2 .

Which of the following is the most likely diagnosis?

Essential thrombocythemia

Philadelphia chromosome–negative chronic myeloid leukemia (CML)

Primary myelofibrosis (PMF)

3. A 22-year-old man is admitted to the hospital for an elective cholecystectomy. You are asked to see him because he had anemia on preoperative testing. He tells you that he has always been told by his physicians that he has mild anemia; his medical history is otherwise unremarkable. His vital signs are normal. His conjunctivae are mildly icteric, and the spleen is palpable in the left upper quadrant. Findings on the remainder of the physical examination are normal. Diagnostic testing results are shown in Table 9.Q3 .

Which of the following tests would most likely help confirm the diagnosis?

Hemoglobin electrophoresis

Osmotic fragility test

Direct and indirect antiglobulin (Coombs) tests

Bone marrow aspiration and biopsy

4. A 28-year-old black man with sickle cell disease presents to the emergency department with abdominal pain, chest pain, and shortness of breath. His dyspnea evolved over 36 hours after a visit with his niece and nephew. His history is significant for approximately 2 emergency department visits or hospital admissions per year for painful crises. Three years ago, he spent 4 weeks in the hospital after an episode of acute chest syndrome. He has been taking hydroxyurea but only intermittently because of financial concerns. His pulse is 116 beats per minute and regular, his blood pressure is 138/76 mm Hg, his respiratory rate is 18 breaths per minute, and his temperature is 38.3°C. Pulse oximetry shows 91% oxygen saturation with room air and 93% with 4 L of oxygen by nasal cannula. His lungs have scattered inspiratory crackles in the right midlung field. His spleen is not palpable. The remainder of the physical examination findings are normal. Diagnostic testing results are shown in Table 9.Q4 .

A chest radiograph shows a right middle and upper lobe air space infiltrate. The patient is given supplemental oxygen, adequate pain control, and intravenous antibiotics. Which of the following should you now order?

Hydroxyurea

Erythrocyte exchange transfusion

Plasma exchange

Anticoagulation with unfractionated heparin

Aggressive intravenous fluid hydration

5. A 70-year-old man presents with weakness of his right arm and leg. His symptoms began yesterday and are now resolved. He also reports a 6-month history of recurrent headaches and fatigue. He is a nonsmoker. His medical history is significant for high blood pressure. His blood pressure is 167/88 mm Hg, his oxygen saturation is 93% on room air, his face is plethoric, and a right carotid bruit is heard. Other findings on physical examination are normal. Diagnostic testing results are shown in Table 9.Q5 .

Carotid ultrasonography shows a 30% stenotic lesion in the right carotid. The patient is hospitalized and begins antiplatelet therapy. Which of the following should you order next?

JAK2 V617F mutation testing

Fluorescence in situ hybridization (FISH) for BCR-ABL testing

Arterial blood gas analysis

6. A 42-year-old woman with a history of systemic lupus erythematosus (SLE) presents with fatigue. She has been receiving anti–tumor necrosis factor therapy and has been managing the SLE well. However, she has recently experienced worsening fatigue. Her vital signs are normal. Her face and conjunctivae are jaundiced, and she has a fading butterfly rash on her face. The spleen is palpable on deep inspiration. Diagnostic testing results are shown in Table 9.Q6 , and the peripheral blood film is shown in Figure 9.Q6 .

Which of the following is the best interpretation of these data?

The hemolysis is predominantly intravascular.

The bone marrow is not responding to the anemia.

Direct Coombs testing results should be positive.

Urine hemoglobin testing results should be positive.

7. A 58-year-old woman with active rheumatoid arthritis presents with fatigue and joint pain. She received the diagnosis of rheumatoid arthritis 5 years earlier and has been taking prednisone 10 mg daily and methotrexate with folate weekly. She has had chronic fatigue and anemia. Her vital signs are normal. Her conjunctivae are pale, and she has active synovitis affecting both knees, her wrists, and elbows, with rheumatoid nodules on the extensor surface of her right forearm. The remainder of the physical examination findings are normal. Diagnostic testing results are shown in Table 9.Q7 .

Which of the following laboratory findings are consistent with this condition?

Elevated hepcidin, elevated ferritin, elevated total iron-binding capacity (TIBC), elevated serum iron

Elevated hepcidin, elevated ferritin, decreased TIBC, elevated serum iron

Decreased hepcidin, elevated ferritin, decreased TIBC, elevated serum iron

Elevated hepcidin, elevated ferritin, decreased TIBC, normal serum iron

Decreased hepcidin, elevated ferritin, elevated TIBC, normal serum iron

Coagulation

8. A 62-year-old man underwent right total knee replacement 8 days ago. Swelling has developed in his right lower extremity, and Doppler ultrasonography confirms the presence of a right superficial femoral vein thrombosis. His current medications include oxycodone and subcutaneous unfractionated heparin. Results of preoperative tests, including a complete blood cell count and liver and kidney function, were normal. Other laboratory data include the following: hemoglobin 12.2 g/dL, leukocyte count 8.5×10 9 /L, and platelet count 60×10 9 /L. In addition to stopping the use of subcutaneous heparin, what is the next most appropriate step in management of this patient?

Start low-molecular-weight heparin therapy.

Start intravenous therapeutic doses of heparin.

Start direct thrombin inhibitor therapy.

Start aspirin therapy.

9. A 45-year-old man presents with deep vein thrombosis of the right femoral vein. Three months ago, he received a diagnosis of systemic lupus erythematosus (SLE). In addition to confirming SLE, laboratory testing also documented the presence of a lupus anticoagulant (LAC). There is no family history of venous thrombosis. Current medications include hydroxychloroquine. Laboratory testing shows normal results for a complete blood cell count and for tests of liver and kidney function. Special coagulation testing confirms the persistence of an LAC. What is the most reasonable duration of warfarin anticoagulation for this patient?

10. A 20-year-old white woman has been admitted to the hospital with pulmonary embolism. She has no chronic illnesses and is receiving no medications except for combination estrogen-progesterone birth control pills that she started using approximately 1 year earlier. Results were normal for a complete blood cell count, baseline prothrombin time, activated partial thromboplastin time (aPTT), and tests of kidney and liver function. The patient is currently receiving therapeutic doses of intravenous unfractionated heparin, and her aPTT is therapeutic at 72 seconds. A panel of thrombophilia tests has been performed. Which of the following statements about her thrombophilia test results is correct?

DNA-based testing for factor V Leiden and prothrombin G20210A mutations are reliable.

Low antithrombin confirms a hereditary deficiency state.

A positive result on lupus anticoagulant (LAC) testing confirms antiphospholipid antibody syndrome.

Low protein S confirms the presence of a hereditary deficiency state.

11. A 62-year-old man with chronic atrial fibrillation has been treated with warfarin. He has no other chronic illnesses and is receiving no other medications long-term except for lipid-lowering agents. Results of his complete blood cell count and tests of renal and kidney function are normal. He checks his prothrombin time monthly and has kept the international normalized ratio (INR) within the therapeutic range (2–3) for the duration of his therapy with warfarin. He has heard about recent US Food and Drug Administration (FDA) approval of dabigatran, which requires no monitoring, and he would like a prescription for this new drug. Which of the following statements is true about the use of dabigatran in atrial fibrillation compared with the well-managed use of warfarin?

Switching to dabigatran would result in superior outcomes.

Switching to dabigatran would result in inferior outcomes.

Switching to dabigatran would provide no significant benefit.

Dabigatran is FDA approved for postoperative thromboprophylaxis for knee and hip replacement surgery.

Dabigatran is FDA approved as an anticoagulant for patients who have received a mechanical heart valve.

12. A 22-year-old woman is brought to the emergency department after having 1 witnessed tonic-clonic seizure. She had appeared confused for the preceding few hours. On examination, she is febrile and appears slightly confused; otherwise, neurologic and physical examination findings are normal. Laboratory testing results are shown in Table 9.Q12 , and the peripheral blood smear is shown in Figure 9.Q12 .

What is the most appropriate next step in management?

Red blood cell transfusion

Platelet transfusion

Gamma globulin administration

13. A 72-year-old man with chronic atrial fibrillation has been receiving dabigatran 75 mg twice daily for the past 6 months. He has not had any thrombotic or hemorrhagic complications. He has a history of colon polyps, for which he needs to undergo a colonoscopy with possible polypectomy. Apart from an irregular pulse, his physical examination findings are normal. Results were normal for a complete blood cell count and tests of renal and liver function. The calculated creatinine clearance is 28 mL/min. For how long should dabigatran use be discontinued before the colonoscopy?

No need to discontinue

Lymphoid Malignancies

14. At her annual physical examination, an asymptomatic 68-year-old woman has lymphocytosis (32×10 9 /L) with a normal hemoglobin level and platelet count. On examination, she has 1-cm lymphadenopathy in the cervical region and no palpable liver or spleen enlargement. A peripheral blood smear shows identically appearing mature lymphocytes with smudge cells. Flow cytometry of the peripheral blood lymphocytes shows a monoclonal B population with dim expression of λ light chain and CD20 that is positive for expression of CD5, CD19, and CD23. Which of the following is the best next step in her management?

Combination chemoimmunotherapy

Chlorambucil therapy

Allogeneic peripheral blood stem cell transplant

Combination monoclonal antibody therapy

Active monitoring for disease progression and complications

15. Ten years ago, a previously healthy 20-year-old woman presented to her physician with a 2-month history of pruritis, drenching night sweats, unintentional weight loss, and nonproductive cough. On examination, she had 2-cm cervical lymphadenopathy. A computed tomographic scan showed a 12-cm-diameter anterior mediastinal mass. An excisional biopsy of a cervical lymph node showed nodular sclerosing Hodgkin lymphoma. After she was treated with ABVD (doxorubicin [ A driamycin], b leomycin, v inblastine, and d acarbazine) combination chemotherapy followed by involved field radiotherapy, the disease was in complete remission. Now you see her for the first time for an annual physical examination. The disease remains in complete remission. Compared to her peers, this patient is at increased risk of which of the following conditions?

Breast cancer

Coronary artery disease

Hypothyroidism

Skin cancer

All of the above

16. An 80-year-old man is admitted to the hospital after falling on an icy sidewalk and fracturing his hip. He undergoes open reduction and internal fixation of the fracture. At surgery, there does not appear to be any bone disease at the fracture site. The patient was previously asymptomatic. Physical examination findings are otherwise unremarkable. Serum protein electrophoresis and immunofixation show an IgM κ monoclonal protein (0.3 g/dL). The complete blood cell count and serum creatinine levels are normal. Skeletal survey shows no additional bone defects. Which of the following statements is true for this patient?

He has multiple myeloma and requires treatment.

He has a lower risk of a clinically significant lymphocytic or plasma cell malignancy than patients with an IgG monoclonal protein.

He requires a radioisotope bone scan to evaluate his bone integrity.

He requires regular follow-up and serial measurements of his monoclonal protein level.

He has a 10% annual risk of multiple myeloma.

17. A 75-year-old African American man was seen last week by his primary care physician for mild dyspnea. He has also noted intermittent peripheral edema. During the evaluation, an electrocardiogram showed low-voltage QRS complexes in the limb leads. The troponin T level was elevated (0.07 ng/mL). This finding suggested the need for a coronary angiogram, which showed no significant coronary artery disease. An echocardiogram showed diffuse left ventricular thickening with a granular texture to the myocardium and a septal thickness of 2.5 cm (normal <1.1 cm). The complete blood cell count results were normal. Serum and urine protein electrophoresis and immunofixation were unremarkable. Serum free light chain levels were not increased. What is the most likely diagnosis?

AA amyloidosis

Light chain–related amyloidosis

Hypertrophic obstructive cardiomyopathy

Amyloidosis due to transthyretin deposition

Amyloidosis due to β 2 -microglobulin deposition

18. A 55-year-old man presented to his primary care physician for evaluation of fatigue. He was previously healthy with the exception of chronic musculoskeletal low back pain, for which he occasionally takes nonsteroidal anti-inflammatory drugs. On examination, he is pale. Complete blood cell count results are as follows: hemoglobin 8.3 g/dL, mean corpuscular volume 73 fL, leukocyte count 6.9×10 9 /L, and platelet count 398×10 9 /L. Results of the fecal occult blood test are positive. During upper and lower endoscopy, a 1.2×2.5-cm ulcerative lesion is noted in the lesser curvature of the stomach. The lesion is biopsied and identified as a MALT lymphoma. Which of the following is characteristic of MALT lymphoma?

Most cases are treated with anthracycline-based chemotherapy.

It is caused by chronic stimulation with Chlamydophila psittaci .

Radiotherapy is necessary in most cases.

It frequently undergoes transformation to a large-cell lymphoma.

The combination of amoxicillin, omeprazole, and clarithromycin is the most appropriate first-line treatment.

19. A 73-year-old woman presented to the emergency department with new-onset back pain, confusion, and constipation over the past week. Her past medical history is significant only for hypertension. On examination, she is slightly pale with slow cognition and point tenderness over the lumbar spine. Plain films of the lumbar spine show osteolytic lesions in L2, L3, and L5. Laboratory values are as follows: hemoglobin 9.3 g/dL, leukocyte count 4.6×10 9 /L with a normal differential count, platelet count 230×10 9 /L, creatinine 1.6 mg/dL, total calcium 13.1 mg/dL, albumin 3.6 g/dL, and total protein 9.1 g/dL. What is the most likely diagnosis?

Metastatic breast cancer

Hydrochlorothiazide use

Multiple myeloma

Primary hyperparathyroidism

Milk alkali syndrome

20. A 48-year-old man presents to the emergency department with a 6-week history of progressively worsening abdominal pain and night sweats. Physical examination findings were significant for palpable bilateral 2-cm axillary lymph nodes and diffuse abdominal tenderness with no rebound or guarding. Computed tomography of the abdomen and pelvis showed retroperitoneal and mesenteric lymphadenopathy. Excisional biopsy of an axillary node was positive for diffuse, large B-cell lymphoma. Positron emission tomography showed fluorodeoxyglucose-avidity in the axillary, mesenteric, and retroperitoneal lymph nodes. Results of the bone marrow examination were normal. Which of the following is the best next step?

Combination therapy with rituximab, cyclophosphamide, doxorubicin, vincristine, and prednisone (R-CHOP)

Observation

Combination therapy with cyclophosphamide, doxorubicin, vincristine, and prednisone (CHOP)

Autologous stem cell transplant

Involved field radiotherapy

1. Answer d.

MDS most commonly manifests as isolated macrocytic anemia. MDS can evolve to include pancytopenia over several years; the typical peripheral smear findings include a dimorphic erythrocyte population (microcytes and oval macrocytes) with an overall prominent macrocytosis and an MCV around 110 fL. The chronicity of MDS—in particular, anemia preceding the diagnosis of pancytopenia by several years—is in contrast to the typically acute manifestation of AML, which is therefore an unlikely possibility in this patient. Primary myelofibrosis, a myeloproliferative neoplasm, causes fibrosis in the bone marrow, resulting in extramedullary hematopoiesis and significant splenomegaly, and typically does not cause a macrocytic anemia. Vitamin B 12 deficiency can cause a megaloblastic anemia and manifest with slowly evolving macrocytic anemia and eventually pancytopenia, but the peripheral smear would not show a dimorphic erythrocyte population. (See Tefferi and Vardiman in the “Suggested Reading” list.)

2. Answer a.

Extreme thrombocytosis may be reactive and occur with severe iron deficiency or inflammatory states (with elevated erythrocyte sedimentation rates) or after splenectomy; patients are typically asymptomatic. Clonal thrombocytosis is related to a myeloproliferative neoplasm, which usually causes splenomegaly. Typical bone marrow findings include a hypercellular bone marrow with increased atypical megakaryocytes in clusters. Essential thrombocythemia may cause extreme thrombocytosis (platelet count >1,000×10 9 /L); however, it can also occur less commonly with polycythemia rubra vera (typically with erythrocytosis), the cellular phase of PMF, or rarely CML. The normal karyotype makes CML much less likely since it typically manifests with the Philadelphia chromosome t(9;22). Increased reticulin fibrosis would have been seen on the bone marrow biopsy if the patient had PMF. (See Tefferi in the “Suggested Reading” list.)

3. Answer b.

When a patient presents with premature gallstones, one should consider whether they may be due to pigment gallstones from chronic hemolysis causing indirect hyperbilirubinemia. The presence of microspherocytes is consistent with hereditary spherocytosis, and the diagnostic test is an osmotic fragility test, which identifies a congenital membrane defect. Typically, acquired warm autoimmune hemolytic anemia, which produces positive Coombs test results, can cause spherocytes as well; however, the history of lifelong anemia makes this diagnosis unlikely. A hemoglobin electrophoresis would help in diagnosing thalassemia or a hemoglobinopathy; however, these conditions do not manifest with microspherocytes on the peripheral blood film. There is no indication for a bone marrow biopsy since the reticulocyte response is appropriate and no other cytopenias are apparent. (See Gallagher in the “Suggested Reading” list.)

4. Answer b.

The patient has acute chest syndrome, a sickle cell anemia complication that is an indication for urgent red cell (not plasma) exchange transfusion to decrease the hemoglobin S level to less than 30% to 35%. Gentle fluid resuscitation is appropriate (along with oxygen support and antibiotics, since about one-third of acute chest syndrome events are initiated by or associated with bacterial pneumonia). Aggressive fluid resuscitation, leading to overhydration, might cause pulmonary edema and worsen the oxygenation. Pulmonary embolism is possible, but full anticoagulation is not warranted until embolism is documented. Use of hydroxyurea might have prevented this crisis, but it is of no value for the acute condition. (See Vij and Machado in the “Suggested Reading” list.)

5. Answer a.

Polycythemia may be secondary, as with erythropoietin- mediated causes such as chronic hypoxemia, living at high altitude, and high oxygen affinity hemoglobinopathies. Polycythemia vera is a myeloproliferative neoplasm that can manifest with arterial thrombosis secondary to hyperviscosity from the increased concentration of erythrocytes. The low erythropoietin rules out erythropoietin-mediated causes, leaving the presumptive diagnosis of polycythemia vera. With JAK2 V617F mutation testing of peripheral blood, results are positive for approximately 90% of patients who have polycythemia vera. FISH for BCR-ABL testing would screen for chronic myeloid leukemia, which does not manifest with polycythemia. Although bone marrow aspiration and biopsy would be helpful, it is not immediately necessary and could be considered later. (See Patnaik and Tefferi in the “Suggested Reading” list.)

6. Answer c.

Hematologic complications of SLE include anemia of chronic disease, pure red cell aplasia, and warm autoimmune hemolytic anemia (WAIHA). The presentation and laboratory data suggest hemolysis, and the blood smear shows spherocytes. These findings are consistent with WAIHA, which causes extravascular hemolysis. The reticulocytosis suggests that the bone marrow response is adequate. In intravascular hemolysis, the urine is positive for hemoglobin. (See Packman in the “Suggested Reading” list.)

7. Answer d.

Rheumatoid arthritis is a chronic inflammatory disorder that may lead to anemia of chronic disease. Anemia of chronic disease results from the effect of elevated cytokines on hematopoiesis, including upregulation of hepcidin, leading to increased ferritin from iron malutilization and downregulation of ferroportin, the main iron exporting system. Transferrin is also downregulated, leading to decreased TIBC and normal to decreased serum iron levels. (See Weiss and Goodnough in the “Suggested Reading” list.)

8. Answer c.

The timing and degree of thrombocytopenia are consistent with immune-mediated heparin-induced thrombocytopenia type II. Unfractioned heparin and low-molecular-weight heparin are contraindicated. Aspirin would not be the sole management agent for established thrombosis. The most appropriate step is to start a direct thrombin inhibitor.

9. Answer d.

Presentation with a vascular thrombosis and persistence of a LAC for 12 weeks or more satisfies the criteria for an antiphospholipid syndrome. This patient has a high risk for recurrent venous thrombosis on discontinuing anticoagulation; thus, long-term warfarin is recommended with periodic reassessment for safety.

10. Answer a.

DNA-based testing is reliable for patients receiving heparin or warfarin and for patients who have acute thrombosis. However, acute thrombosis and heparin can cause lower antithrombin activity results, which should be verified at another time, when heparin and acute thrombosis are not factors. A single positive test result for LAC does not confirm antiphospholipid syndrome; follow-up testing at 12-week intervals is required to demonstrate persistence of LAC. Acute thrombosis and estrogen use can lower protein S levels; thus, abnormally low results require follow-up confirmation.

11. Answer c.

Among patients randomly assigned to receive dabigatran, overall outcomes were noninferior when compared with the well-managed use of warfarin, thus providing no significant advantages. The group of patients that derived the most benefit from dabigatran was the group with INRs outside the recommended therapeutic range. Dabigatran is FDA approved only to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation.

12. Answer d.

Plasma exchange is the treatment of choice for thrombotic thrombocytopenic purpura (TTP). Although red blood cell transfusion may be indicated, it does not address the underlying pathogenesis of TTP. Platelets are thought to be contraindicated in TTP because of the theoretical possibility of worsening the TTP. Gamma globulin is ineffective in increasing the platelet count in TTP.

13. Answer d.

Dabigatran is cleared through the kidneys. It has a prolonged half-life in patients who have a creatinine clearance less than 30 mL/min compared with patients who have a creatinine clearance greater than 30 mL/min.

14. Answer e.

Chronic lymphocytic leukemia (CLL) is a clonal lymphoproliferative disorder of mature lymphocytes. The clinical diagnosis requires a B-lymphocyte count of more than 5×10 9 /L. Peripheral blood smears typically show smudge cells, which are lymphocytes that have broken during processing of the slide. The clinical course of CLL is chronic in most patients. For those with early-stage disease, standard practice is to withhold treatment until the disease is active or progressive. However, patients need to be monitored for disease progression, autoimmune complications, infections, and second cancers.

15. Answer e.

Hodgkin lymphoma therapy is curative in about 80% of cases. However, there are late complications of therapy, particularly in those treated before modern chemotherapy and radiotherapy. At 15 years, the risk of death from other causes surpasses that of risk of death from Hodgkin lymphoma. Patients are at higher risk of secondary malignancies, cardiovascular disease, thyroid disorders, and infertility than the general population. Many of these conditions can be attributed to chemotherapy and radiotherapy.

16. Answer d.

This patient has monoclonal gammopathy of undetermined significance (MGUS), the most common dysproteinemia. In MGUS, the M protein level is typically less than 3 g/dL, the bone marrow has less than 10% plasma cells, and the hemoglobin, creatinine, calcium, and bone radiographs are normal. The risk of progression to a lymphocytic or plasma cell malignancy is about 1% per year. Patients with an IgM or IgA monoclonal protein are at higher risk of progression than those with an IgG protein. Patients with MGUS need to be observed.

17. Answer d.

The patient has senile cardiac amyloidosis. This syndrome is usually isolated to the heart with few clinically significant deposits elsewhere, and the echocardiographic findings are often out of proportion to the degree of symptoms. Transthyretin is the protein causing the amyloid deposits; most patients have wild-type transthyretin.

18. Answer e.

With combination antibiotic therapy, 70% of gastric MALT lymphomas are cured. In cases refractory to antibiotics, tumors may carry the t(11;18) translocation, and involved field radiotherapy is effective. Combination chemotherapy is reserved for advanced disease. The majority of cases are associated with Helicobacter pylori infection.

19. Answer c.

This patient has multiple myeloma with evidence of end-organ damage from the plasma cell proliferative disorder (hypercalcemia, renal failure, anemia, and osteolytic bone lesions). The other answer choices are possible causes of hypercalcemia, but only multiple myeloma accounts for all the presenting symptoms, including the elevated level of total protein.

20. Answer a.

This patient has advanced-stage, diffuse, large B-cell lymphoma, and R-CHOP chemotherapy is the standard of care. Rituximab is an anti-CD20 monoclonal antibody that improves overall survival when added to CHOP chemotherapy for aggressive B-cell lymphomas. For patients whose disease relapses or is refractory, autologous stem cell transplant is the standard therapy. Radiotherapy can be used in combination with chemotherapy in early-stage (I-IIA) nonbulky disease but is not standard therapy for advanced disease.

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Interview Questions

Investment Banking Interview Questions and Answers

101 common technical, fit, behavioral, and logic investment banking interview assessments with sample answers

Mr. Arora is an experienced private equity investment professional, with experience working across multiple markets. Rohan has a focus in particular on consumer and business services transactions and operational growth. Rohan has also worked at Evercore, where he also spent time in private equity advisory.

Rohan holds a BA (Hons., Scholar) in Economics and Management from Oxford University.

Prior to becoming our CEO & Founder at Wall Street Oasis, Patrick spent three years as a Private Equity Associate for Tailwind Capital in New York and two years as an Investment Banking Analyst at Rothschild.

Patrick has an MBA in Entrepreneurial Management from The Wharton School and a BA in Economics from Williams College.

101 IB Interview Questions And Answers

IB Interview First Impressions - Carrying Yourself

Common First Investment Banking Interview Questions: Crafting Your Story

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101 IB Interview Questions and Answers

The Investment Banking (IB) interview process is highly competitive and designed to rigorously filter out potential candidates. Consequently, answering the behavioral, technical, and logical questions that are asked in the interview with proven answers that we provide is key to converting an interview into an offer.

The following free WSO IB interview guide is a comprehensive tool designed to cover every single aspect of the interview process, guiding you from the very beginning to the very end.

This guide features 101 of the most common technical, behavioral, logical, and group-specific questions that are asked by investment banking professionals to candidates during the hiring process as well as sample answers to each one of them. It is a great place to start your preparation before investing in our more comprehensive IB interview course .
This resource includes 21 bank-specific questions from bulge bracket investment banks (Goldman Sachs, J.P Morgan, Citi, etc.).
This interview guide consists of 16 sections which cater to various phases of the interview process.

Before we begin, we wanted to make sure you know about WSO Academy, a program that guarantees you are job in high finance (including investment banking)...

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We’ve all heard about it at one point or another. Forbes has written on it. “First impressions are the best impressions.”

Within just a few seconds of meeting, people will form a solid opinion of who you are. Perfecting your first impression while carrying yourself with a healthy balance of confidence and humility lays the foundation and tone for the rest of the interview. The following section has been written by Patrick Curtis, CEO of WallStreetOasis, based on his vast experience of interviewing candidates for investment banking positions.

Read it over, perfect your entry and learn how to leave a lasting impression on your interviewer from the get-go.

How to Carry Yourself

The biggest thing I am looking for is humble confidence - someone I would like to grab a beer with.
Listen, listen, listen!!! So many mistakes happen just because of not listening carefully and not being in the moment.
Be punchy, brief, and learn how to end a sentence. I can't tell you how many times people have gotten into trouble by rambling off into some ass-backward irrelevant tangent. Learn to be comfortable with a little silence here and there while we absorb your answer.

Common First Investment Banking Interview Questions: Crafting Your Story

There are no excuses for not perfecting what is in your control. Irrespective of the bank, the position, or your region, you can be sure these 2 questions will be asked as they’re a standard in the industry.

Anticipating both of these questions beforehand, crafting a compelling narrative around them, and selling yourself on it will make you stand out from amongst the pool of potential candidates.

1. Walk me through your background/resume

Dial-in a cohesive 90-second resume walkthrough that focuses on the positive and motivating factors behind every transition (school to job, job to better job, most recent job to grad school). A good example:

I went to school to learn how to design cars, but after my first internship I realized that I like interacting with clients directly and pursued full-time roles in B2B sales. In these sales roles, I developed solid selling skills as well as gained exposure to a, b, and c. Since I wanted to continue honing those skills and branch out to focus on x, y, and z, I am seeking a new role/promotion which provides that opportunity…

Be deliberate. Every move you made should have a reason (preferably that you initiated). Don't be negative. Never say you left because you were bored or "wanted to try something new."

2. Why investment banking?

The answer to this question should be tailored uniquely to you and to the firm you are interviewing with. While answering this question, it is key to capitalize on your previous professional/leadership experience, highlight it and create a logical path as to why you are now trying to break into investment banking. A good answer to this question is addressing the three main reasons, illustrated below with an example each:

Given the variety of professional backgrounds that candidates come from, WSO has created a dedicated page to answer this question.

Did you know?

WSO’s “Why investment banking?” article covers 43 sample answers , tailored for students and professionals from backgrounds ranging from law to consulting.

Technical questions are a critical component of almost every investment banking recruiting process. You WILL be asked these questions, and your interviewers will expect detailed and accurate responses. The following section features 30 of the most common IB interview questions, with a detailed sample answer for each of them.

At the end of these 30 questions, we also have provided you with 14 exclusive bank-specific technical questions (from 7 bulge bracket banks) to kickstart your mock interview training.

1. What are the three main financial statements?

Sample Answer: The three main financial statements are

Income Statement
Balance Sheet
Statement of Cash Flows

The Income Statement discloses a company's revenues and expenses, which together yield net income over a period of time. The Balance Sheet discloses a company's assets, liabilities, and equity on a specific date. The Cash Flow Statement starts with net income from the Income Statement; then adjusts for non-cash expenses, non-operating expenses like capital expenditures, changes in working capital, or debt repayment and issuance, to arrive at the company's closing cash balance.

2. How are the three main financial statements connected?

Sample Answer: Net income flows from Income Statement into the Cash Flow Statement (CFS) as Cash Flow from Operations. Net income less dividends are added to retained earnings from the prior period's Balance Sheet (BS) to come up with retained earnings as on the date of the current period's BS. The opening cash balance on the CFS is from the prior period's Balance Sheet while the closing cash balance on the CFS is the balance on the current period's Balance Sheet.”

The following chart gives you a more comprehensive overview of how the 3 financial statements are connected to help visualize and present better for your interview:

3. If you could use only one financial statement to evaluate the financial state of a company, which would you choose?

Sample Answer: The cash flow statement because it shows the actual liquidity of the company and how it is generating and using cash. The balance sheet just shows a snapshot of the company at a point in time, without showing the performance of the company, and the Income statement has several non-cash expenses that may not be affecting the company's health and can be manipulated. Overall, the key to a great company is generating significant cash flow and having a healthy cash balance, both of which are disclosed in the CF statement.

4. How would a $10 increase in depreciation expense affect the three financial statements (assuming a 40% tax rate)?

Sample Answer: In the income statement, the depreciation increase of $10 is set off by a reduction of $4 on taxes as depreciation is a tax-deductible expense for the net reduction in net income of $6. In the cash flow statement, net income is reduced by $6, depreciation is increased by $10, net cash from operations and total cash is increased by $4. This increase in cash is because depreciation is a non-cash expense that has no impact on cash while the reduction in taxes affects the cash flow. In the balance sheet, property, plant, and equipment balances reduce by $10, cash balance increases by $4, and retained earnings reduce by $6 due to the reduction in net income.

The following points summarize this:

On the income statement

$10 depreciation expense, 40% tax rate
Reduction in net income of $10 x (1 - 40%) = $6

Reduction in net income flows to cash from operations

Net income reduced by $6
Depreciation increases by $10
Net increase in cash from operations of $4
Ending cash increases by $4

Ending cash flows onto th e balance sheet

Cash increases by $4
Property, plant, and equipment lose $10 in value
Net decrease in assets of $6, matches the net drop in shareholder equity due to the reduction of retained earnings from the $6 is net income

5. “Walk me through the Income Statement”

Sample Answer: The first line of the Income Statement represents revenues or sales. From that, we subtract the cost of goods sold, which gives gross margin. Subtracting operating expenses from gross margin gives us operating income (EBIT). We then (add/subtract) interest expense (income), taxes, and other expenses (income) to arrive at Net Income.

6. What is Enterprise Value?

Sample Answer: Enterprise Value (EV) is the value of an entire firm, both debt, and equity. This is the price that would be paid for the company in the event of acquisition without a premium.

EV = Market Value of Equity + Debt + Preferred Stock + minority interest - Cash

7. What is WACC and how do you calculate it?

Sample Answer: WACC is the acronym for Weighted Average Cost of Capital. It reflects the overall cost for a company to raise new capital, which is also a representation of the riskiness of investment in the company (higher the risk, higher the cost of capital). It is commonly used as the discount rate in a discounted cash flow analysis to calculate the present value of a company's cash flows and terminal value .

The formula below helps you calculate the WACC of a company if you are put on the spot and asked to calculate it as part of your technical interview:

where, E = Market value of equity D = Book value of debt P = Value of preferred stock K E = Cost of equity (Calculate using CAPM) K D = Cost of debt (Current yield of debt) K P = Cost of preferred stock (Interested rate on preferred stock) T = Corporate tax rate

8. What is EBITDA?

Sample Answer: EBITDA stands for Earnings before Interest, Taxes, Depreciation, and Amortization. It gives us a good idea of a company's profitability and is a quick metric for free cash flow because it will allow you to determine how much cash is available from operations to pay interest, CAPEX , etc.

EBITDA = Revenue - Expense (except depreciation and amortization)

It is also often used for rough valuations in a comparable company or precedent transaction analysis as part of the EV/EBITDA multiple.

9. Would you be calculating enterprise value or equity value when using a multiple based on free cash flow or EBITDA?

Sample Answer: EBITDA and free cash flow represent cash flows that are available to repay holders of a company’s debt and equity, so a multiple based on one of those two metrics would describe the value of the whole business from the perspective of all its investors.

A multiple such as the P/E ratio, based on earnings alone, represents the amount available to common shareholders after all expenses are paid, using which you would be calculating the value of the firm’s equity.

10. Can a company have a negative book equity value?

Book equity value is the accounting value of equity derived by subtracting the value of a company's liabilities from its total assets. It is the total shareholder’s equity, an amount shown as “Total Equity” in the Balance Sheet of the company.

Sample Answer: Yes. If there are large cash dividends or if the company has been operating at a loss for a long time.

11. What is typical of an LBO (leveraged buyout) transaction?

A firm (usually a PE firm) uses a high amount of debt (70 - 90%) to finance the purchase of a company, then uses the company's cash flows to pay off that debt over time.

The acquired company’s assets may be used as collateral. Ideally, the original debt of the acquired company would have been partially retired at the time of exit.

In the context of a private equity investment, the debt acts as a way to magnify returns (boost IRR for the fund), but it can also backfire if the acquisition turns south.

12. Why would a company issue equity rather than debt to fund its operations?

Sample Answer: There are many reasons why a company would want to issue equity instead of debt. Some of them are:

If the company feels its stock price is inflated, it can raise a relatively large amount of capital with comparatively minimal dilution to existing shareholders.
If the projects the company is looking to invest in do not produce immediate or consistent cash flows to pay its debt.
If the company wants to adjust the cap structure or pay down debt.
If the owners of the company want to sell off a portion of their ownership.

13. How is it possible for a company to have a positive net income but go bankrupt?

Sample Answer: This is possible if working capital erodes (such as increasing accounts receivable, lowering accounts payable, lower inventory turnover) or the company is growing so fast that it’s unable to raise enough capital to fund operations. Another possibility is the existence of financial fraud.

14. What are some ways you can value a company?

Sample Answer: The three most common ways of valuing a company are: Comparable companies or multiples analysis: This is the most common way to value a company. This method attempts to find a group of companies that are comparable to the target company and to work out a valuation based on what they are worth. The idea is to look for companies in the same sector and with similar financial statistics (Price to Earnings, Book Value, Free Cash Flow, EBITDA, etc) and then assume that the companies should be priced relatively similarly.

Market valuation or market capitalization: In this method, the market value of equity is used and hence can only be used for publicly traded companies. It is calculated by multiplying the number of shares outstanding by the current stock price.

Discounted cash flow analysis: This method involves calculating the sum of the present values of all future cash flows to give the value of the entire company including debt and equity, which is also called enterprise value .

15. Which of the valuation methodologies will result in the highest valuation?

Here is a list of the four valuation methodologies organized from highest valuation to lowest valuation:

Precedent Transaction - Since a company will pay a control premium and a premium for synergies coming from the merger, values tend to be high.
Discounted Cash Flow - Those building the DCF model are frequently optimistic in their projections.
Market Comps - Based on other similar companies and how they are trading in the market. No control premium or synergies.
Market Valuation - Based on how the target is being valued by the market. Just equity value, no premiums or synergies.

16. Why might there be multiple valuations of a single company?

Sample Answer: Each method of valuation will generate a different value because it is based on different assumptions, different multiples, or different comparable companies and/or transactions. Generally, the precedent transaction methodology and discounted cash flow method lead to higher valuations than comparable companies' analysis or market valuation does.

The precedent transaction result may be higher because the approach usually will include a “control premium” above the company’s market value to entice shareholders to sell and will account for the “synergies” that are expected from the merger.

17. Walk me through a DCF.

In an interview, it is important to keep your technical overview at a high level. Start with a high-level overview and be ready to provide more detail upon request.

Sample Answer:

Project out cash flows for 5 - 10 years depending on the stability of the company
Discount these cash flows to account for the time value of money
Determine the terminal value of the company - assuming that the company does not stop operating after the projection window
Discount the terminal value to account for the time value of money
Sum the discounted values to find an enterprise value
Subtract the present value of debt (this is generally the market value of debt) and then divide by diluted shares outstanding to find an intrinsic share price

Common questions that follow this are:

Why do you multiply by (1-tax rate)?

Sample Answer: You do this because interest expense (the cost of debt) is tax-deductible so you need to account for the benefit provided by this "debt tax shield."

What is the cost of equity?

Sample Answer: The cost of equity is usually calculated using the Capital Asset Pricing Model (CAPM). CAPM = Risk-free rate + Beta * (Expected market return - Risk-free rate)

What is the exit multiple method for determining the terminal value?

Sample Answer: Find an industry average multiple and multiply it by final year revenue (if using EV/Revenue) or final year EBITDA (if using EV/EBITDA).

18. What is an Initial Public Offering (IPO)?

Sample Answer 1: An IPO is the first public sale of stock in a previously private company. This is known as “going public.” The IPO process is incredibly complex, and investment banks charge high fees to lead companies through it. Companies go public for several reasons—raising capital, cashing out for the original owners, and investor and employee compensation. Some negatives against “going public” include sharing future profits with public investors, loss of confidentiality, loss of control, IPO fees to investment banks, and legal liabilities.

19. What is the difference between accounts receivable and deferred revenue?

Sample Answer: Accounts receivable is revenue, which has been earned and recognized because the product has been delivered, but the customer has not yet paid the cash. Deferred revenue is cash that has been collected for products that have not yet been delivered, so the revenue has not yet been recognized. Accounts receivable is an asset on the Balance Sheet, whereas deferred revenue is a liability.

20. When calculating enterprise value, do you use the book value or the market value of equity?

Sample Answer: You should use the market value of equity always because the book value is not adjusted once it is recorded in the books at the time of issue of the shares. It is common to very often see a share priced in the hundreds or thousands having a face value of $1 or $10. This is due to the historical nature of accounting. Hence, the book value of equity is useless for any kind of valuation, and market value is the preferred metric to use.

21. If enterprise value (EV) is $80mm, and equity value is $40mm, what is the net debt?

Enterprise Value = Equity Value + Net Debt + Preferred Stock + Minority Interest.

Sample Answer: If we assume there is no minority interest or preferred stock, then Net Debt will be $80mm – $40mm, or $40mm.

22. What is the difference between cash-based accounting and accrual-based accounting?

Sample Answer: Cash-based accounting recognizes sales and expenses when cash flows in and out of the company.

Accrual-based accounting recognizes revenues and expenses as they are incurred regardless of whether cash flows in or out of the company at that exact time.

Accrual-based accounting is the more common method for large corporations.

23. What are the major factors that drive mergers and acquisitions?

24. All else equal, should the WACC be higher for a company with a $100 million market cap, or a company with a $100 billion market cap?

Sample Answer 1: Normally, the larger company will be considered “safer” and therefore will have a lower WACC all else being equal. However, depending upon their respective capital structures, the larger company could also have a higher WACC.

Sample Answer 2: Without knowing more information about the companies, it is impossible to say. If the capital structures are the same, then the larger company should be less risky and therefore have a lower WACC. However, if the larger company has a lot of high-interest debt, it could have a higher WACC.

25. What is Beta?

Sample Answer: Beta is a measure of the volatility of an investment compared with the market as a whole. The market has a beta of 1, and hence, investments that are more volatile than the market have a beta greater than 1 while those that are less volatile have a beta less than 1.

26. How/why do you lever or unlever Beta?

Sample Answer: Unlevering beta allows us to remove the effect of debt in the capital structure. This shows us the beta of the firm's equity had it not used any leverage in its capital structure. Also, if we are trying to do a market comparison with a company that's not on the market (so no beta), you can take a comparable company and unlever its beta and use this unlevered beta as a proxy for the unlisted company's beta.

27. What is net working capital?

Net Working Capital = Current Assets – Current Liabilities

Current assets include items on the Balance Sheet like inventory, accounts receivable, prepaid expenses, and other short-term assets. Current liabilities include items such as accounts payable, accrued expenses, deferred revenue, and other short-term liabilities.

An increase in net working capital means more cash is tied up in the operations. This could be from increasing current assets like inventory or accounts receivable. If you increase inventory, for example, it is not (yet) a cost on the Income Statement, but still blocks the cash that was used for purchasing the inventory which needs to be accounted for on the CF statement. This is why in calculating free cash flow you subtract an increase in net working capital.

A decrease in net working capital means less cash is tied up in operations. This could happen due to changes such as increasing accounts payable or reducing inventory. If you reduce inventory, it means you are selling more goods than you are producing, which means you are realizing a cost on your Income Statement. If you are increasing accounts payable, you are preserving your liquidity by taking a little bit longer to pay your vendors for your raw materials/inputs.

Sample Answer: Net Working Capital is calculated as current assets minus current liabilities. It is a measure of a company’s ability to pay off its short-term liabilities with its short-term assets. A positive number means they can cover their short-term liabilities with their short-term assets. A negative number indicates that the company may have trouble paying off its creditors, which could result in bankruptcy if cash reserves are insufficient and further financing cannot be arranged.

28. What happens to free cash flow if net working capital increases?

Intuitively, you can think of working capital as the net dollars tied up to run the business. As more cash is tied up (either in accounts receivable, inventory, etc.), free cash flow will be reduced.

Remember that if the assets go up in value (denoting a purchase of assets), this is a use of cash; and if a liability goes up (denoting funds received), it is a source of cash.

Sample Answer: You subtract the change in Net Working Capital when you calculate Free Cash Flow, so if Net Working Capital increases, your Free Cash Flow decreases and vice versa.

29. How can a company raise its stock price?

Sample Answer: There are many ways a company can raise its stock price, a few of which are:

A company can repurchase stock, which lowers the number of shares outstanding and therefore increases its value per share.
It can improve operations to produce higher earnings, causing its EPS to be higher than anticipated by industry analysts, which will send a positive signal to the market.
It can announce a change to its organizational structure such as cost-cutting or consolidation, which would lead to increased earnings in general.
It could announce the institution of a dividend policy or an increase in an existing dividend.
It can announce an accretive merger or an acquisition that will increase earnings per share.

30. If you were the Chief Financial Officer (CFO) of a Fortune 500 company, what would be your concerns? Explain from a high level what the long-term financial implications are for your company.

Sample Answer: Fortune 500 companies are usually in the mature stage of their business lifecycle. This means they have stable growth accompanied by a good amount of stable cash flows and balances. As a CFO of one, I would look out for signs of declining products or services to be discontinued while also actively keeping an eye out for opportunities to expand and grow, either through mergers and acquisitions or by increasing the spending on internal research and development.

WSO’s Bonus IB Interviews Tip From an Interviewer

Walk me through every calculation you are doing. I want to hear you think out loud.

The process matters far more than your answer and gives you a chance to demonstrate a grip on the concepts.

I sometimes just ask for a simple calculation, along with "Are you sure?" to put on a little pressure and see how you respond.

I am looking here for you to take five seconds, double-check your math, and answer with a confident, "Yes, I am sure."

Don't be afraid to say, "I don't know" to a tough technical question.

As an analyst, I expect you to ALWAYS tell me when you don't know something, and never wing your way through an answer.
If you give an, "I don't know" follow it with, "But here is what I am thinking. Tell me if I am on the right track."
And walk me through your thoughts. This is a great analyst quality because it shows that you'll think about a problem critically before you call me and ask about it.

Being able to clearly, confidently, and consistently answer the 30 technical questions bank-specific questions above will undoubtedly give you a competitive edge over the applicant pool. However, to achieve full technical mastery, it is critical you expect technical questions that are specific to each of the investment banks.

The following section features 14 exclusive questions (2 per investment bank) for 7 of the biggest investment banks in the world, to help kickstart your training process for your interviews and superdays .

The following questions have been taken from WSO's company database which is sourced from the detailed experiences of more than 30,000 people with IB interviews. The WSO IB Interview Course includes access to over 4,000 interview questions across 400+ banks (no other resource comes close).

Goldman Sachs IB Interview Questions

At a high level, there are 5 steps to an LBO:

Calculate the total acquisition price, including the acquisition of the target's equity, repayment of any outstanding debt, and any transaction fees (such as the fees paid to investment banks and deal lawyers, accountants, consultants, etc.)
Determine how that total price will be paid, including: - Equity from the PE sponsor, - Roll-over equity from existing owners or managers, - Debt, seller financing, etc.
Project the target's operating performance over ~5 years and determine how much of the debt principal used to acquire the target can be paid down using the target's FCF over that time.
Project how much the target could be sold for after ~5 years in light of its projected operating performance; Subtract any remaining net debt from this total to determine projected returns for equity holders.
Calculate the projected IRR and MoM return on equity based on the amount of equity originally used to acquire the target and the projected equity returns upon exit.

An increase in cash flow causes an increase in future value (FV)
An increase in the growth rate of future cash flows

Factors that may cause a company's PV to decrease:

Increased discount rate
Delay in receiving future cash flows
Reduction in the growth rate of future cash flows

JPMorgan Investment Banking Interview Questions

Sample Answer 2: The Nigerian election takes place in February. Four years ago, President Muhammadu Buhari gained power on a surge of optimism, pledging to restore security and end corruption. His Presidential record has been mixed, and his popularity and health have declined (he recently denied rumors of being replaced by a body double). The old regime may regain political power, impacting the free flow of goods through the country.

An increase in the interest rates will affect the cost of borrowing for companies. This means a lesser amount of funding from banks, which leads to companies having slower growth on average as compared to before the interest rate hike.

The higher cost of borrowing will also affect DCM. I would expect companies to issue fewer bonds or maintain the same capital structure but cut back on other expenses e.g. layoffs. Given the slower growth of companies, I would expect lesser interest from investors on IPOs. The slower growth and low valuations will then lead to an increase in M&A by strategics. On the other hand, the higher cost of borrowing might reduce the amount of leveraged M&A activity at the same time.

Overall, I feel that the increase in interest rates will affect M&A and capital markets negatively, and thus hiring will be down next year.

Morgan Stanley Interview Questions

Retail or Airlines: EV / EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization & Rental Expense)
Energy: EV / EBITDAX (Earnings Before Interest, Taxes, Depreciation, Amortization & Exploration Expense), EV / Daily Production, EV / Proved Reserve Quantities
Technology (Internet): EV / Unique Visitors, EV / Page views

Note: Feel free to use multiples that you have picked up from other sources. These are for illustrative purposes.

An earthquake would cause the country’s GDP to immediately decline sharply due to the immediate effects of the earthquake as a lot of productive resources may be put out of use. But then the GDP growth will start to increase to an above-average level as there would be an increased amount of spending on rebuilding the infrastructure.

Citigroup Interview Questions and Sample Responses

Yes, a company could have a negative book equity value if the owners are taking out large cash dividends or if the company has been operating for a long time at a net loss, leading to the company having to take on debt to fund loss of cash. Eventually, equity can be negative implying that the entire operation is funded by debt.

This question is a lot more broad, giving you a lot of room to work with. A common method of answering this question would be bringing up 2-3 different types of financial risk concepts, giving a straight definition as to what they are, and following up with an example to demonstrate applied understanding.

Credit Risk - This is the risk of a possible loss being incurred by a business or an individual, should their borrower fail to repay a loan or meet contractual obligations. It is impossible to quantify credit risk and precisely predict which borrowers will default on loans, but there are risk management teams built to minimize a business’ risk and manage their credit exposure. An example of credit risk would simply be a bank lending a citizen a loan of $100,000 to start their business as an entrepreneur, on which the bank incurs the risk of not having the loan repaid should the citizen’s business go bankrupt.

Another related type of risk would be,

Interest Rate Risk - This is the risk incurred where there may be a reduction in the value of investment assets should the interest rate environment change drastically in a short period. An example of this would be that if interest rates increased, the value of fixed-income investments would decrease.

BoA Sample Questions on Superday

Terminal Value or TV is the value of any investment at the end of the investment period. This will usually assume a constant growth rate into the future. it can be calculated by applying an exit multiple to the company’s last projected year’s EBITDA, EBIT, or Free Cash Flow (multiples method). Alternatively, the Gordon Growth method can be used to estimate TV based on its growth rate into perpetuity.

The formula for calculating TV without accounting for growth is: Expected cash flow / (1 + Required rate of return)^Time

The formula for calculating TV using Gordon Growth is: Terminal Value = Expected dividend / (Required rate of return – Growth rate).

The investment banking division is sometimes referred to as corporate finance and is broadly split into 2 sectors, products and industries. The purpose of both is to provide advisory on transactions, mergers, and acquisitions and to arrange (and sometimes even provide) financing for these transactions.

Investment banking product groups are broken down into:

Leveraged Finance (LevFin) - Issuance of high-yield debt to firms to finance acquisitions and other corporate activities.
Equity Capital Markets (ECM) - Advice on equity and equity-derived products (IPOs, shares, capital raises, secondary offerings, etc.)
Debt Capital Markets (DCM) - Advice on raising and structuring debt to finance acquisitions and other corporate activities.
Restructuring – Improving the structures of a company to make it more profitable or efficient.

Credit Suisse Interviewing Questions

M&A seems to be off the table because REITs have low cash balances and can't do stock issuances because they would be dilutive. Therefore, my advice would be to basically sell assets in non-core markets to raise cash.

Company A’s EPS is $10 / 10 = $1.00. To complete the deal, Company A must issue 6 ($150 / $25.00) new shares which means that the combined share count after the deal is 16 (10 + 6). Since no cash or debt was used and the tax rates are the same and the combined net income = Company A net income + Company B net income = $10 + $10 = $20. The Combined EPS, therefore, is $20 / 16 = $1.25, which is an increase of 25% in the EPS, and this is what is called accretion.

UBS Questions Asked by Interviewers

Thinking of cash flow/share the same way as earnings per share, the PE for A is 2.5 and B is 2.5. As both their EPS are equal, the transaction is neither accretive nor dilutive.

You need to remember that the leverage multiple stands for Debt/EBITDA; so calculating out the leverage multiples, you will see both A and B are leveraged at 2.5, hence, the combined leverage multiple of A and B is still 2.5; if the transaction is equity-financed, the leverage would decrease and the company would be de-leveraged; deals are usually more accretive with debt due to tax deduction on interest expense.

Most Common Technical Interview Question - WSO Bonus:

15. “pitch me a stock”.

Many interviewers will ask you in one way or another to pitch a stock if you have any experience with trading, a private wealth management internship, a hedge fund internship, or anything that deals with market transactions. If this is you, spend 30 minutes to a couple of hours finding a stock you like and why. Even if it doesn't get asked, it's always better to be safe than sorry. Here's a good explanation of how to answer this question.

Do you have an M&A group interview coming up? Or perhaps an ECM superday right around the corner? We’ve got you covered.

The following 16 group-specific questions have been taken from our forums and company database where over 30,000 candidates have reported their interviewing experiences for different divisions within investment banks.

The following questions and sample answers will help you achieve specialized focus and demonstrate expertise for the group you’re interviewing for.

Mergers & Acquisitions (M&A)

The main reason two companies would want to merge would be the synergies the companies could create by combining their operations. However, some other reasons include gaining a new market presence, an effort to consolidate their operations, gaining brand recognition, growing in size, or gaining the rights to some property (physical or intellectual) that they couldn't gain as quickly by creating or building it on their own.

A strategic buyer is generally a corporation that wants to acquire another company for strategic business reasons such as synergies, growth potential, etc. An example of this would be an automobile maker purchasing an auto parts supplier in order to gain more control of their COGS and keep costs down.

A financial buyer is generally a firm looking to acquire another company purely as a financial investment. An example is a private equity fund doing a leveraged buyout of the company.

Leveraged Finance (LevFin)

Credit card

A car loan is riskier than a home loan because a car loses its value much quicker. To compensate for the higher risk profile and lack of collateral, credit card companies charge much higher interest rates when compared to a typical car loan and mortgage while the risk associated with a lower value of collateral in car loans is why they carry higher interest rates compared to mortgages.

The software company because of recurring revenues from annual contracts that are even more guaranteed than a hardware store, assuming that both companies are mature.

Debt Capital Markets (DCM)

Think about how bonds are priced – based on their discounted future cash flows. If any of those cash flows is in doubt, then the bond's value falls accordingly. (Think of a UST bond as being priced with risk-weighted cash flows of 100%. A BBB bond might be priced with risk-weighted cash-flows of 95%, just as an example - although in reality the bonds are priced with a spread/all-in yield that implicitly contains the risk, rather than calculating the risk % driving the spread). So any macro event that would impact companies' profitability/cash flow would affect the price of corporate bonds. That said, corporate bond spreads are more driven by micro factors than by broader economic trends unless those economic/systemic factors are very pronounced.

The price and yield of a bond move inversely to one another. Therefore, when the price of a bond goes up the yield goes down.

The reason for this is that the return on a bond (when annualized, this is called yield) is the difference between its current price and future repayment (generally bonds are redeemed at par). The lower the price, the higher is the return as the repayment is constant regardless of its price. As the price increases, the return reduces thereby reducing the yield.

Web pic showing relationship between bond price and yield

Let’s understand this better with the help of an example. Let’s assume a bond can be redeemed at a par value of $100 on maturity (one year from now). Let’s now assume that the bond is trading at $80. The yield on the bond can be calculated as 25% ((100/80) - 1). What if the price instead was $90? The yield reduces to 11.11% ((100/90) - 1). Hence, higher prices mean lower yields and vice versa.

Equity Capital Markets (ECM)

An Initial Public Offering or IPO is the very first sale of stock to the public by a private company. This is also known as “going public”. Two kinds of companies will undertake an IPO:

Startup companies looking to raise capital and investors
Large private companies looking to become publicly traded

To find out more about IPOs, check out WSO’s “What Is An Initial Public Offering (IPO)?” page here .

Since a private company has no market capitalization and no beta, you would most likely use the WACC for a comparable public company adjusted upwards for the lack of liquidity.

Restructuring

This depends on the formal definition of the leverage ratio, but assuming debt/EBIT is implied we can set up two simple equations:

Debt/EBIT = 5
EBIT / (Debt * Interest rate) = 5

Solving these equations we find that the interest rate is 4%.

Assuming operating income is EBIT, add back depreciation (a non-cash expense) and deduct CAPEX to get Unlevered Free Cash Flow (UFCF) = 35. Then deduct the interest expense but add back interest tax shield, for the net expense of $9 (15 * (1 - 40%)) assuming 40% tax rate. This gives us a Levered Free Cash Flow (LFCF) of $26.

Value, because the payoff will be quicker. In high inflation periods, short-duration equities are favored as cash flows are eroded less by the higher cost of capital imposed by higher inflation. Growth equities need a longer holding period before capital yielding projects are realized, at which point the discount factor will be higher making them subject to more erosion from inflationary pressure.

It depends, if the product portfolio of the company is vastly different with varying risk profiles, then it would not be right to use WACC as the discount rate. The discount rate is the cost of capital. If the risks in each product line are vastly different, so should the cost of capital. Using a broad stroke denominator such as the company's WACC would not be right in this case.

Sales & Trading (S&T)

Two steps. I’d look at what they’re interested in, and then I’d look at how they wanted to change.

Quite impossible for equities, 0 beta would be risk-free like treasuries. You would have to find two industries that were negatively correlated to remove idiosyncratic risks.

Risk Management

They earn revenue through APR, interchange, late fees, and subscription fees and their primary costs are operations and marketing-related expenses.

Tapering is a balancing act to reverse the effects of quantitative easing once its objectives have been achieved. The Fed must consider the right rate of implementation so as to not lead the economy into a recession.

Are you looking for questions that are unique to particular IB group that you are interested in joining? Do you have an interview coming up and have preferences on what industry you want to join? We've got you covered.

The following 16 industry-specific questions have been taken from our forums and company database where over 30,000 candidates have reported their interviewing experiences for different divisions within investment banks.

The following questions and sample answers will help you achieve specialized focus and demonstrate expertise for the industry you're interviewing for.

Consumer & Retail

The answer to increasing your margins while having lower revenue is to cut back on expenses. Revenue - expenses = gross profit and gross profit/revenue = gross margins.

The increase in shareholders equity would be equivalent to the increase in assets (x), due to the effect of the equation below: Assets = Liabilities + Shareholders equity.

Assets are recorded at cost (what you paid for them).

Energy and Utilities

The main regulatory hurdle that the power sector faces is distributed electricity generation. Distributed generation poses a threat to existing power utilities because it takes away power demand from them.

However, there are a number of ways in which to handle this emerging trend. One way is to structure tariffs in a way that increases affordability. The other is to offer time-of-use tariff structures that can flatten the duck curve , which occurs when renewables ramp down in the evenings, exactly when electricity demand is highest.

If we assume it’s a single asset company, we can estimate the capital efficiency based on historical data and apply it against the company's CAPEX forecast to reach a "new additions" production estimate. From there, applying the historical asset production decline rate against "base" production and summing the numbers together leads us to a forward estimate.

Financial Institutions Group (FIG)

WACC decreases at low levels of leverage due to the tax shield created by interest payments and then increases exponentially due to the increasing riskiness of investing in a highly levered company.

A DCF involves predicting the unlevered free cash flows that a business will generate, discounting it into the present and then adding it up to get the enterprise value.

A DDM on the other hand only looks at dividends the company pays, and then divides it using the required rate of return to find the value of equity.

A DCF typically spits out an enterprise value whereas DDM is an equity value based on the present value of projected free cash flow to equity (% of dividends for a bank since they have regulatory capital requirements, which is a limiter on growth assumptions on a bank DDM).

Comps are more market-based and sensitive to environmental trends, such that in times of high valuations (such as now), comps > DCF, and in times of lower than FMV valuations, DCF > comps.

This is because biotech companies don't operate in perpetuity, we assume that once the patent ends, generics will flood the market driving profits close to zero.

Industrials

Levered beta measures the risk of a firm with debt and equity in its capital structure to the volatility of the market. Unlevered beta removes the debt component.

Take terminal year EBITDA, calculate TEV using current EV/EBITDA multiples of comp set, and take the present value of that total.

Natural Resources

1. Upstream 2. OFS 3. Downstream 4. Midstream

Upstream is likely to be the most volatile, due to its association with risk of exploration and sensitivity to prices. OFS is second because it's adjacent to upstream. Downstream is third because demand is relatively inflexible and is subject mostly to price sensitivity. Midstream is the lowest beta because it's a volume business.

A Section 338(h)(10) election blends the benefits of a stock purchase and an asset purchase.

Legally it is a stock purchase
However, accounting-wise it’s treated as an asset purchase.
The seller is still subject to double-taxation – on its assets that have been appreciated and on the proceeds from the sale.
The buyer receives a step-up tax basis on the new assets it acquires, and it can depreciate/amortize them so it saves on taxes.

Even though the seller still gets taxed twice, buyers will often pay more in a 338(h)(10) deal because of the tax-savings potential. It’s particularly helpful for:

Sellers with high NOL balances (more tax-savings for the buyer because this NOL balance will be written down completely – and so more of the excess purchase price can be allocated to asset write-ups).
If the company has been an S-corporation for over 10 years – in this case, it doesn’t have to pay a tax on the appreciation of its assets.

The requirements to use 338(h)(10) are complex and bankers don’t deal with this – that is the role of lawyers and tax accountants.

- Find key ratios LTV, DSCR, Debt Yield - Assess property value - Assess similar properties in the area - Go over potential covenants

Some statistics to consider in such a situation would be,

Market Stats (Cap Rate, Rent, Vacancy)
Asset Class
Value add or Core

Technology / Media / Telecom (TMT)

MOIC’s simplistic calculation tells investors how much money they’re ultimately receiving from an investment while IRR includes the impact of time over which the returns were generated.

Considering the government measures involving lockdowns, in-store purchases are likely to decrease therefore lowering profits. This can, however, be countered by Apple building an extensive or expanding on its current online infrastructure to ensure an optimal and sustainable online shopping experience for customers.

You've reached the behavioral/ fit interview. This means that the firm believes you are smart enough for the job. At this point, the little things matter. Fit questions are a major part of the IB analyst interview. The focus of fit questions is to see who you are and how you would fit into the firm's culture.

This section features 12 of the most common behavioral/fit questions you are likely to be asked during your interviews, followed by an exclusive set of 7 bank-specific (from 7 bulge bracket banks) behavioral questions to support you in tailoring your response to each bank and walking out with an offer.

1. What are some of your strengths?

If you can, bring up a strength that doesn’t appear on your resume but could catch attention. For example, if you have performed in concert or theatre all your life, learning to be poised in front of strangers and/or large groups, it may be a good strength to share.

2. What is the one word that describes you best?

Motivated, smart, driven, humble, efficient. All of these are good options to use. Make sure to have an example to back up whatever word you choose with a specific story.

3. What has been your favorite class in college and what was your grade?

The course you name should have something to do with business/finance/economics, and the grade you report should be a good one. If you say your favorite class was “dancing”, why are you looking to go into finance? Why do they want to hire you?

It is worth noting however, you must have a genuine justification and rationale behind claiming a finance class was your favorite. If you do not have a compelling reason behind your answer, interviewers will call your bluff and see through it easily.

4. “What is the most important thing your resume doesn’t tell me that I should know?”

Talk about a skill that is unique to you (something that makes you memorable) and that cannot be documented on a resume. Think about things like your communication skills, teamwork skills, etc…not your math skills, which can be seen in GPA or SAT scores. Once you decide on the quality you want to present, illustrate it with a story from your life. A common variation of this question is “What separates you from the last person with your GPA from your school?”

Sample answer: Ever since my freshman year of high school, I have loved to perform. I was in the musical each year of high school, and have had a lead role in a play each year in college. This has allowed me to develop a comfort speaking in public situations, and with people, I don’t know or have just met. I think that this will be an extremely valuable skill in finance, speaking with clients, on the phone, and when presenting my work to my coworkers.

5. “Tell me about a time that…”

There are countless variations of this question, from “Tell me about a time you acted with integrity” to “Tell me about a time that you had difficulty dealing with coworkers”. It is key to have a well-rehearsed response for each of them, and a general guideline to follow.

Ideally, you can come up with 6-8 stories that cover the 30-40 basic questions, with only slight modifications. DON’T wing it. For every potential question, map out the story using the SOAR framework.

Describe the Situation (10-15 seconds), Obstacle (10-15s), Action (60-75s), and Result (15-30s). Stories for these questions should be 1.5 - 2 minutes long and focus only on what's important.

6. What is your biggest weakness?

Seeing as to how common this question is (even outside of the finance industry), we have a dedicated page for this question to support you in answering it perfectly during the interviewer. The “Good Responses To Biggest Weakness Questions” page can be found here .

7. What are you looking for in this job?

The interviewer wants to make sure you are aware of what this job entails, and what most analysts get out of the experience. You should acknowledge the long hours and the heavy workload while making it clear that you are ready to take on the challenge. Emphasize the appeal of a great learning experience that you would be unable to get in any other job straight out of school. Explain how you relish the prospect of pushing yourself and being challenged to do your best work in this job, and working with and learning from successful people.

Sample answer: I am going into this as an unparalleled learning experience. Everyone I have spoken to within the industry tells me you learn everything on the job. While my undergraduate studies prepared me for business, I know that most of the skills I need will be acquired on the job. I understand the hours and the workload, and I want to work incredibly hard to gain real-world experience that isn’t available in any other profession at this stage in my career. I know these skills will prepare me for anything I want to do later in my career.

8. What has been your favorite job so far?

If possible, pick a job that requires similar skills to the job for which you are applying and explain why those skills or requirements made it you're favorite. Talk about how you were forced to learn on the fly or multi-task or think critically because those are all skills you will need in finance.

9. What has been your least favorite job so far?

Talk about a job where you were bored, or not challenged, or not busy. None of those things will be the case in finance so they won’t be an issue.

10. What competitive activities have you participated in, and have they been worthwhile?

Finance is competitive. Firms are always competing for business and colleagues can even be competitive with one another (although most won’t admit it). You need to show that you are comfortable in competitive situations, but still can act with class and show respect.

Sample answer: I played varsity football in college. We won the conference 2 consecutive years and played at the NCAA tournament. Working with my teammates to accomplish a common goal and beat the competition was an amazing experience, really exhilarating.

11. If you had a million dollars that you weren’t allowed to invest, how would you spend it?

Make sure your background backs up whatever answer you give. If you have never volunteered in your life, don’t say you’re going to donate your money to a non-profit and go work for them. Have it relate to something you are interested in, and make sure that whatever you are spending it on can cost roughly a million dollars.

12. What are you interested in?

There are two ways that you can answer this question properly and you may want to explore both in your answer. First, you can mention things that you are interested in that are job-related like keeping up with current events, studying for the CFA, etc. Second, you can speak about your hobbies and your interests outside of work. The latter works great if you happen to share an interest with your interviewer. Hint: If you know the names of your interviewer you can do a little research beforehand and see if you can find any common interests so you can push the conversation in that direction.

WSO's Bonus Tip

"Once you get yourself in that room, I don't care about your GPA or what else you have on your resume. I am looking for 3 things, A connection with myself and the firm's culture, Will you be able to do the work? and Do you have a passion for the job?"

As taken from our forum .

Knowing the culture of each bank before walking into an interview is key to clicking with the interviewer and walking out with an offer.

The following section features 7 exclusive questions for 7 of the biggest investment banks in the world, to help you jump start your training for the respective investment banks you are interviewing for.

The following questions have been taken from WSO’s company database which is sourced from detailed IB interviews experiences of more than 30,000 people.

1. What do you like to do outside of school and work? (Goldman Sachs Behavioral Questions)

Ideally, the interviewer is looking for anything you can speak genuinely and passionately about, and support it with examples of your dedication towards it from your past experiences.

2. What makes you stand out / What should we remember you by? (JP Morgan Fit Questions)

This is similar to the ‘What are your strengths?’ question. Have a concise 30-second pitch prepared. Concentrate on the three main bullets highlighted in the introduction, and identify three of your traits that manifest those qualities. Examples include things like being extremely driven, never giving up, wanting to learn, looking for challenges, etc. Make sure you take only 20-30 seconds and speak with confidence, but make sure to avoid arrogance.

3. What are your leadership involvements outside of finance? (Morgan Stanley Fit Interview)

It is important to show that you are comfortable taking up a leadership role or working under the leadership of someone else. It is important to be able to do both. Talk about past projects that show you being successful in both types of roles. Talk about your teamwork skills (communication, collaboration, etc.) and how those skills are effective when you are the leader as well as when you are supporting someone else’s leadership.

4. Why Citi? (Citigroup Soft Skills Evaluation)

This question can generally be asked by any bank, and the preparation routine is consistent across all such banks. Ideally, you want to tie in and present an alignment between your interests and values, with the firm’s culture, and support this with examples.

An exceptionally strong way of demonstrating this would be networking with current investment bankers at the bank, and talking about the appreciation you felt towards the characteristics of those you networked with (refer to specific people wherever possible) and concluding with how that makes you feel the bank would be a great place to work.

5. What do you consider the biggest negative about this job? (Bank of America Behavioral Questions)

Your interviewer is giving you a chance to give a “negative” about the job and explain why you don’t see it as a negative. The overwhelmingly popular response to this question is the lack of work-life balance, long hours, very unpredictable schedules, etc. Quickly mention the negative and then move on to why it doesn’t bother you.

Sample answer: I have been fortunate enough to have a lot of contacts who work in finance, and their usual response to this question is the long hours. However, every single person I have spoken with has said that they enjoy their job and they think the hours are worth it. This job will give me 4 - 5 years of work experience in only two years. It’s an opportunity I crave and a learning experience I don’t want to miss. I am ready for the challenges and I want to show that I can handle them.

6. How important do you think it is to be maintaining connections in this industry? (Credit Suisse Fit Assessment Question)

While networking is generally seen as important for advancing one’s professional career irrespective of industry, there is significantly more weight placed on its value within the investment banking industry relative to other industries. Ideally, your answer should acknowledge this fact, and you should support this with examples of you maintaining connections with a variety of professionals and the insights you have learned through their shared experiences.

7. What are your hobbies? (UBS Behavioural Interviews)

This question is quite a personal one, so feel free to expand upon this as per your choice. One key point we’d like to iterate is that it is disadvantageous to “fake” an interest or hobby with the intent of faking a “click” with your interviewer. Interviewers can often see through this, and it could potentially harm your chances of getting an offer.

It is much more beneficial to highlight a hobby that requires a set of transferable skills or values to IB, such as competitive sports (which involve having a strong work ethic), and passionately speaking about them.

Everything You Need To Break into Investment Banking

6 Logical Puzzles - Interview Brain Teasers

Logical puzzles, brainteasers, and riddles are an important part of the interview process as they allow the interviewer to determine your critical thinking abilities.

For this section of the interview, interviewers aren’t focused on whether you get the right answers or not. Rather, they are interested in your thought process while solving the riddles you are presented with.

Given this, it is key to walk your interviewer through your thinking as you progress through the riddle, who may even probe you with questions to assist you. Giving them a rundown of your thoughts and occasionally asking if you’re headed in the right direction demonstrates your capabilities to reflect, and approach a problem with composure.

It is still, however, extremely useful to anticipate these logical puzzles beforehand to avoid being put on the spot and caught off guard in the interview. The following section has 5 commonly asked logical puzzles that you can prepare for beforehand to impress your interviewer.

1. A room with no windows has 3 light bulbs. You are standing outside with 3 switches that control each of the three bulbs. If you can only enter the room once, how can you determine which switch controls which bulb?

Answer: First, turn on two switches: call them Switch 1 and Switch 2. Leave them on for a couple of minutes to let them get nice and hot. Then, turn off Switch 1 and enter the room. The bulb that is lit should be the one that is controlled by Switch 2. Of the remaining two bulbs, the hot one is the one controlled by Switch 1. The last one, off and not hot, is controlled by Switch 3.

2. What is 17 squared? What’s 18x22?

Answer: Don’t worry; they want to know how you will handle this question, and it is not difficult if you think about it correctly.

Think 17 x 17 is just 17 x 10 plus 17 x 7. You know 17 x 10 is 170. Now 17 x 7 is 10 x 7 and 7 x 7. This gives you 170 + 70 + 49, or 289. Whatever you do, don’t panic!

Now see if you can do 18 x 22: 18 x 20 + 18 x 2. Easy, 360 + 36 = 396.

As far as brainteasers go, this is a rather common one. You will do better if you have practiced these types of questions.

3. How many NYSE-Listed companies have 1 letter ticker symbols?

Answer: It could be 26 (letters in the English alphabet), but it is only 24 because I & M are saved for Intel and Microsoft, in case they change their minds.

4. How many gas stations are there in the United States?

Answer: With a question like this, the interviewer is looking at your thought process, not that you can figure out how many gas stations are in the U.S.

The easiest way to go about answering a question like this is to start small and work your way to the bigger question. Think about your town. Say your town has 30,000 people, and you have 5 gas stations serving that area.

So you have 7,500 towns with 5 gas stations and 2,500 “towns” with only 1.

Do a little mental math and you get the number of 40,000 gas stations in the U.S.

5. A stock is trading at 10 and 1/16. There are 1 million shares outstanding. What is the stock’s market cap?

Answer: This is just a test of your mental math. If a fourth is .25, an eighth is .125, and a sixteenth is .0625... The stock price is 10.0625 and the Market Cap is 10.0625 million.

6. How many degrees are there between a clock’s two hands when the clock reads 3:15?

Answer: The quick thought would be 90 degrees, but it isn’t. If the clock is 360 degrees, the minute hand will be exactly at the 90-degree mark. The hour hand will be ¼ of the way between the 3 and the 4. Since there are 12 numbers, the 3 and the 4 are 30 degrees apart, making the hour hand 7.5 degrees beyond the 3, and 7.5 degrees from the minute hand. The picture below helps illustrate this better.

Questions To Ask The Interviewer at the End

After approximately an hour of drilling from the interviewer, here you are, at the very end. The interviewer looks at you and asks, “Do you have any questions for me?” This is your last and best chance to leave a lasting impression, so ask a thoughtful question for which the answer cannot be found with a simple google search.

Some of the questions WSO recommends are

I bet you were in my shoes a few years ago - what initially attracted you to X bank?
How would you describe the culture here?
Can you talk about your role in the last [M&A, ECM, DCM] deal you worked in and what specifically you learned from it?

These questions have been taken from “What Are Some Good Questions To Ask The Interviewer At The End Of The Interview?”, posted by WSO user @soontobe. Check out his full post with additional questions here .

Once you have asked your question, listen sincerely to the interviewer’s response. They want to see if you are genuinely interested, and not simply asking for the sake of asking. Take down notes occasionally if you have to.

As you wrap up, thank the interviewer once again for their time and shake their hands firmly. Sometimes an interview may go extremely well, while at other times not so much so. Irrespective of the situation, show respect and leave on a positive note with the interviewer. A thank-you email a few hours after the interview is generally appreciated.

Resources to learn more about sending thank you emails after interviews:

The Muse - How to Write an Interview Thank You Note Email Template
Indeed - Sample Thank You Letter After Interview
Zety - Thank You Email After an Interview
The Balance Careers - Thank You email After Job Interview
Career Sidekick - Thank You Note After Interview

Having mastered all the technical and behavioral/fit questions, as well as logical riddles above, you are in an exceptionally strong position for your IB interviews.

However, there is much more to excelling in IB interviews than simply memorizing sample questions and answers. In a pool of highly qualified and competitive candidates, interviewers look for more than someone who simply aces technicals.

They look for a candidate who would fit right into the company, who are able to stand out and showcase their strengths in a way their competition can’t match.

Given this, it is no surprise that the most successful candidates go above and beyond in the preparation process, taking the time to master the art of selling themselves in an interview and clicking with their interviewers. They build upon their social skills, and utilize these soft skills to steer the direction of the interview in their favour, giving them an upperhand which cannot be matched.

When considering this, it is not a stretch to say one’s soft skills play just as much as a role in their interview’s outcome as their technical skillset.

If you’d like to get started on learning these powerful tips, here are some additional resources from WSO’s hall of fame.

3 Tools That Will Take You A Long Way

Read Dale Carnegie's How To Win Friends and Influence People : If you have read it, read it again. Take the time to practice every single one of the principles over and over again. You can become excellent at communicating with this one book, and if you are ambitious, please check out Influence by Robert Cialdini .
Master selling: Again, people think of selling as something you either have or you don't. WRONG. Selling is a skill that brings together preparation and the skills of communications and influence. Read How to Master The Art of Selling by Tom Hopkins . If you are serious, consider creating a Selling Black book to sell your most valuable commodity - YOU.
If you're bold, dip your toe in the water and learn the most advanced skills of influence - NLP and conversational hypnosis. As part of this, you will learn nuances of language and non-verbal communications that few people even know about. It's hard to learn from a book, so feel free to google for courses on NLP.

Note: This tip was provided by WSO user @geoffblades, A former investment banker at Goldman Sachs and investor at the Carlyle Group. The full writeup by him, “How Do You CRUSH Your Interviews?”, can be found here .

Show Them What They Want to See

Your general personality will come out throughout the interview - there is no hiding it. Being able to do the work well is shown through the confidence you display while answering the general questions along with how well you answer the technicals.

Showing passion is a little more difficult, but it comes out in different ways. A few things that make the interviewer say “This kid knows his stuff” are:

How excited you are to answer questions,
The level of detail that you can answer a technical question
The types of questions that you ask when I tell you about what I do and the product that I trade.

Chances are, showing passion comes from a combination of those examples.

Additionally, this is learned more with experience, but there comes a point in the interview where you have the ability to gain control of the interview and steer it in the direction you want. If you're having a conversation about China or Michael Lewis, you can keep it going by talking about another book that you have read. If you are asked a question, you can answer it in a way that almost guarantees the next question, which you will be prepared for.

The number of choke points in an interview where you can gain control and dictate flow is endless, you just need to learn how to spot them.

Note: These are 2 of 10 tips by WSO user @Gekko21. His full writeup, “Gekko's Guidance (10 Rules To Interviewing) - Part 1” can be found here .

So If You Want To Give Yourself A Leg-Up In Getting An Interview (Written by an interviewer)

Below are a few tips to help give you a boost in your investment banking interview:

It helps to have a high GPA but is not a guarantee for anything.
You SHOULD address the question of "Is he/she interested in banking?". If you've never interned in finance and are a non-traditional major, you should be actively involved (pref. at a senior level) in the finance clubs, you should participate in finance/modeling training seminars sponsored by your school, or have a section under interests with "Readings'' or "Favorite Books'' that have a finance tinge to them (more “ When Genius Failed ” or “ Fooled by Randomness ” or “ Barbarians at the Gate ”, less “ Monkey Business ” or “ Liars Poker ”)... Wall Street Journal , DealBook , FT , etc... I wouldn't advise adding that section if the rest of your resume already sells your finance interest... otherwise, it’s overkill and you seem uninteresting and boringly uni-dimensional. You want to be well-rounded.
Formatting is EVERYTHING and there is NO excuse for typos or inconsistencies in formatting.

The full undergrad recruiting series from our forums is available here:

UG Recruiting Part I: How A Resume Becomes An Interview
UG Recruiting Part II: The First Round Interview
UG Recruiting Part III: The Super Day And Offer

What is Hirevue?

Hirevue is a video conferencing program built to reduce hiring time for their clients whilst still attracting and acquiring talented candidates. Hirevue is used by many major banks including Goldman Sachs, JP Morgan, and Morgan Stanley.

How does Hirevue work?

Hirevue gives candidates a certain set of questions to answer during the interview process, in which their answers are recorded and then analyzed using artificial intelligence (AI). The results provide insights into candidates which investment banks then use to make informed hiring decisions.

The AI tracks and analyzes verbal, as well as non-verbal cues such as facial movements, body language, speech formation, as well as attire, and clothing. These data points are then processed by algorithms and generate results (employability score) allowing employers to predict a candidate’s performance on the job based on their presentation during the interview.

What are the questions asked in Hirevue interviews?

Hirevue aims to predict your capabilities for the job you’re applying for based upon your soft skills and presentation of yourself during the interview. As such, the interview consists of a majority of behavioral questions (as covered above), with some banks not even asking a single technical question to candidates.

The following is a list of 15 sample questions Hirevue has previously asked candidates during interviews, credit to The University of Colorado .

Tell me a little about yourself.
What are your long-term career plans?
What made you leave your previous job?
Tell me about your strengths and weaknesses.
Why do you want to work here?
What makes this position a good fit for you at this point in your career?
Tell us how your experience and training have prepared you for this position.
Give us your understanding of our organization
Tell us about a time when you had to balance multiple priorities. Please give an example that demonstrated how you navigated completing work priorities to attain the best result.
Describe a work scenario in which you were faced with competing priorities. How did you juggle them all and still meet everyone’s expectations?
Describe a high-pressure situation (either within a work setting, or beyond) that you were put in unexpectedly. How did you adjust and still create a successful outcome?
Tell us about a time you were most creative.
What do you enjoy about working in customer service? What do you dislike or find challenging?
Explain your approach to completing multiple assignments in a workday.
Tell us about a mistake you’ve made on the job and what you learned from it.

The following youtube video by Afzal Hussein , an ex-Goldman Sachs employee, shows him covering 18 questions and answers asked by J.P.Morgan’s Hirevue interviews.

WSO’s bonus tips to excelling in Hirevue interviews:

Dress appropriately (especially for investment banking interviews) This is pretty self-explanatory, make sure you are dressed well and look presentable.
Rehearse and practice You’re at an advantage with Hirevue as you can anticipate which questions are going to be thrown at you. Prepare for these questions beforehand, rehearse and practice your stories. Record yourself and replay it, find places to improve, and repeat the process until you are able to consistently and confidently answer questions. Ideally, the actual Hirevue interview itself should simply be a rehearsal of your past practice sessions, nothing should be catching you off guard. If you want the upper hand, ask your close friends and other respectable people in the industry to review your recordings and offer feedback. Perfect your delivery, practice makes perfect.

M&I 400 Investment Banking Questions Guide vs WSP’s The Investment Banking Interview Guide (The Red Book) vs WSO’s Investment Banking Interview Prep Course

One question we receive a lot from students and professionals alike, given the many courses flooding the market, is which interview course is the best in the industry for breaking into investment banking. The following table and comparison present a comparison between the top three resource providers: the Wall Street Oasis (WSO), WallStreetPrep (WSP), and Mergers & Inquisitions (M&I). This comparison explains why we believe WSO’s IB Prep Course remains the gold standard in the industry, with features unmatched by competitors.

With that being said, WSO leads the industry for IB recruiting as the IB prep course gives you access to thousands of interview insights by actual candidates all across the world across a variety of divisions in finance. The advantages and insights gained by this are simply unmatched by our competitors, and we believe you’ll feel the same way as us once you’ve got our guide as well.

Many of the sample answers in the guide above were taken from WSO’s very own Investment Banking Interview Prep Course , which features:

7,548 questions across 469 investment banks
3 Modules to master technical + fit + networking
Access to Company Database for 12 months

Think about it - if this page can set you miles ahead of the competition, imagine what our complete guide can do for you.

Receiving the title of, “The Insider's Guide on How to Land the Most Prestigious Jobs on Wall Street” , the WSO IB Interview Prep Course will walk you step-by-step through the interview process, and place you in the strongest position to land the job. Click the button below to check it out.

Additional resources from our forums:

Investment Banking Resume Template - Official WSO CV Example
Investment Banking In The UK - An Overview
Investment Banking Analyst: A True Day In The Life
P/E Vs. EV/EBITDA - Advantages/Disadvantages?
Investment Banking Vs. Capital Markets - How Different Are They?
WSO Financial Dictionary
Some Observations From An MD

List of Bulge Bracket Investment Banks and Boutiques

Currently, the bulge bracket consists of the following banks:

Goldman Sachs (GS or Goldman) | GS Overview | GS Site
JPMorgan Chase (JPM) | JPM Overview | JPM Site
Morgan Stanley (MS) | MS Overview | MS Site
Credit Suisse (CS) | CS Overview | CS Site
Bank of America Merrill Lynch (BofA) | BofA Overview | BofA Site
UBS | UBS Overview | UBS Site
Deutsche Bank (DB) | DB Overview | DB Site
Barclays Capital (BarCap) | BarCap Overview | BarCap Site
Citigroup (Citi) | Citi Overview | Citi Site

Boutique IBs can range in size from reasonably large, global firms to tiny one-person firms. Below is a list of some of the larger and more well-known boutiques, sometimes referred to as the 'elite boutiques':

Piper Jaffray (Now Piper Sandler) | Piper Jaffray Overview | Piper Jaffray Site
Rothschild | Rothschild Overview | Rothschild Site
Moelis | Moelis Overview | Moelis Site
Jefferies & Co. | Jefferies & Co. Overview | Jefferies & Co. Site
Blackstone | Blackstone Overview | Blackstone Site
Lazard | Lazard Overview | Lazard Site
Qatalyst Partners | Qatalyst Partners Overview | Qatalyst Partners Site
Evercore | Evercore Overview | Evercore Site
Houlihan Lokey | Houlihan Lokey Overview | Houlihan Lokey Site
Centerview | Centerview Overview | Centerview Site

Additional interview resources

To learn more about interviews and the questions asked, please check out the additional interview resources below:

Private Equity Interview Questions and Answers
Hedge Funds Interview Questions and Answers
Finance Interview Questions and Answers
Accounting Interview Questions and Answers
FP&A Interview Questions and Answers

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Case Study: Will a Bank’s New Technology Help or Hurt Morale?

Leonard A. Schlesinger

A CEO weighs the growth benefits of AI against the downsides of impersonal decision making.

Beth Daniels, the CEO of Michigan’s Vanir Bancorp, sat silent as her chief human resources officer and chief financial officer traded jabs. The trio had founded their community bank three years earlier with the mission of serving small-business owners, particularly those on the lower end of the credit spectrum. After getting a start-up off the ground in a mature, heavily regulated industry, they were a tight-knit, battle-tested team. But the current meeting was turning into a civil war.

Leonard A. Schlesinger is the Baker Foundation Professor at Harvard Business School, where he serves as chair of its practice-based faculty.

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Case/Source Based MCQs of Money and Banking chapter class 12

October 31, 2021
MCQS , Money & Banking

Looking for Case study or Source-Based MCQs (Multiple Choice Questions) of Money and Banking chapter of Macroeconomics Class 12 CBSE, ISC and other state Board.

I have made a collection of important MCQs

Lets Practice.

Case/Source Based Multiple Choice Questions of Money and Banking Chapter Class 12

Following are the MCQs

1. Based on the passage below, answer the following questions.

The Reserve Bank of India (RBI) is India’s Central Bank, also known as the banker’s bank. The RBI controls the monetary and other banking policies of the Indian government. The Reserve Bank of India (RBI) was established on April 1, 1935, in accordance with the Reserve Bank of India Act, 1934. The role of RBI has undergone a significant change after the introduction of the new Economic Policy in 1991.

The Reserve Bank of India (RBI) is India’s central bank and regulatory body under the jurisdiction of the Ministry of Finance, the RBI is responsible for the issue and supply of the Indian rupee and the regulation of the Indian Banking system. It also manages the country’s main payment systems and works to promote its economic development.

On 8 November 2016, the government of India announced the demonetization of all ₹ 500 and ₹ 1000 banknotes of the Mahatma Gandhi Series on the recommendation of the Reserve Bank of India (RBI).

Answer the following Questions.

1. Why RBI is said to be a banker of the bank. Choose the correct option

a) Lender’s of last resort b) controller of credit c) Decide LRR d) None of the above.

Ans – a)

2. ‘RBI is responsible for issue and supply of Indian Rupee in the economy’. Identify the function of RBI and explain.

a) Central bank has the authority to issue currency in the economy. b) This develops the public faith in the system of note circulation. c) It allows the central bank to supervise and control the money supply. d) All of the above.

Ans – d)

3. Define Demonetisation.

a) it refers to selling the public sector to the private. b) It refers to the release of new coins. c) It refers to the process where currency notes of certain denominations are declared no longer as legal tender. d) None of the Above.

Ans – c)

4. How the role of RBI has changed after the 1991 New Economic Policy.

a) Its role changes from the regulator to facilitator b) Interest rates decision are left with financial institutions c) It only formulates the guidelines and decision-making rights are left with financial institutions d) All of the above.

The Monetary Policy Committee of the Reserve Bank of India kept interest rates on hold Thursday even as it vowed to keep policy sufficiently loose to help revive the coronavirus battered economy. Accepting a key demand of lenders and the corporate sector, the central bank cleared a one-time restructuring of loan accounts to bail out stressed borrowers, including personal, small, and medium loans.

The details of the loan restructuring scheme – expected to kick in after the moratorium on loan repayments ends. August 31 – will be worked out by a committee headed by former ICICI Bank Chairman KV Kamath. The RBI also continued to provide support on the liquidity front and opened a new targeted window for small lenders.

The central bank kept the repo rate unchanged at 4 percent and reduced the reverse repo rate to 3:35 percent.

Answer the following questions on the basis of the above Case.

Q.1 Suppose you are a member of the Monetary Policy Committee of the RBI. You have suggested the ___________ of the money supply be ensured to help revive the coronavirus battered economy.

a) restriction b) release c) doubling d) no change

Ans – b)

Q.2 “The Monetary Policy Committee of the RBI kept interest rates on hold—-“. Which of the following is highlighted above by the term ‘interest rates’?

a) Bank Rate and Repo Rate b) Bank Rate and Lending Rate c) Repo Rate and Reverse Repo Rate d) Bank Rate and Reverse Repo Rate

Q.3 What does the ‘Repo Rate’ mean?

a) Rate at which banks borrow from the RBI for short term b) Rate at which banks borrow from the RBI for long term c) Rate at which banks deposit excess funds with the RBI d) Rate at which banks lend funds to the public

Q.4 ‘Reduction in Repo Rate by RBI’ is likely to _ the demand for goods and services in the economy.

a) increase b) decrease c) double d) not effect

The key indicators of RBI Monetary Policy along with their current rates in the table given below:

On 9th October 2020, RBI has kept the Repo Rate unchanged at 4.00% and reduced reverse repo rate to 3.35%. In addition to that, the bank rate stands at 4.65%. This has been done to limit the damage to the economy caused by the Covid-19 and subsequent lockdowns.

Q.1 What does RBI Monetary Policy 2020 mean?

a) It is the policy formulated by the RBI in 2020 related to expenditure and taxation of the government. b) It is the policy formulated by the RBI in 2020 realted to money matters of the country. c) It is the policy formulated by the RBI in 2020 related to the government budget. d) It is the policy formulated by the RBI in 2020 realted to the distribution of credit among users as well as the rate of interest on borrowing and lending.

Ans – b), d)

Q.2 What does the ‘Bank Rate’ mean?

Q.3 Which of the following is a quantitative credit control technique of RBI?

a) CRR b) SLR c) Repo Rate d) All of these

Q.4 Cut in Reverse Repo Rate is likely to _ the demand for goods and services in the economy during Covid – 19 lockdowns.

Case Study – 3

Keeping in view the continuing hardships faced by banks in terms of social distancing of staff and consequent strains on reporting requirements, the Reserve Bank of India has extended the relaxation of the minimum daily maintenance of the CRR of 80% for up to September 25, 2020. Currently, CRR is 3% and SLR is 18.50%.

“As announced in the Statement of Development and Regulatory Policies of March 27, 2020, the minimum daily maintenance of CRR was reduced from 90% of the prescribed CRR to 80% effective the fortnight beginning March 28, 2020 till June 26, 2020, that has now been extended up to September 25, 2020,” said the RBI.

Q.1 The full forms of CRR and SLR are:

a) Current Reserve Ratio and Statutory Legal Reserves b) Cash Reserve Ratio and Statutory Legal Reserves c) Current Required Ratio and Statutory Legal Reserves d) Cash Reserve Ratio and Statutory Liquidity Ratio

Q.2 What will be the value of money multiplier?

a) 33.33 b) 5.4 c) 4.65 d) None of these

Q.3 SLR implies:

a) Certain percentage of the total banks’s deposits has to be kept in the current account with RBI b) Certain percentage of net total demand and time deposits has to be kept by the bank with themselves. c) Certain percentage of net demand deposits has to be kept by the banks with RBI d) None of the above

Decrease in CRR will lead to __ .

a) fall in aggregate demand in the economy. b) rise in aggregate demand in the economy c) no change in aggregate demand in the economy d) fall in general price level in the economy

Case Study – 4

Due to Covid – 19, the Reserve Bank of India (RBI), cut Repo Rate to 4.4% the lowest in at least 15 years. Also, it reduced the CRR by 100 basis points. Previously, it was 4%. RBI governor Dr. Shaktikanta Das predicted a big global recession and said India will not be immune. It all depends on how India responds to the situation. Aggregate demand may weaken and ease core inflation.

Q.1 CRR stands for:

a) Cash Reserve Ratio b) Current Reserve Ratio c) Cash Required Rate d) Current Required Rate

Q.2 Cut in Repo Rate by RBI is likely to __ the aggregate demand in the Indian Economy.

“ reduced the CRR by 100 basis points. Previously, it was 4%.” Thus, CRR is reduced to ___ .

a) 5% b) 3% c) 96% d) 104%

Besides reduction in CRR and Repo Rate, What other measures can be taken by the Government of India through its budgetary policy to combat recession?

a) Decrease the bank rate b) Sell government securities in the open market c) Increase margin requirements on secured loans d) Decrease taxes and increase government expenditure

Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

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Case/Source Based MCQs of Money and Banking chapter class 12
Case/Source Based Multiple Choice Questions of Money and Banking Chapter Class 12. Following are the MCQs. 1. Based on the passage below, answer the following questions. The Reserve Bank of India (RBI) is India's Central Bank, also known as the banker's bank. The RBI controls the monetary and other banking policies of the Indian government.