What are investment banking interview questions and what do banks actually test
Investment banking interview questions evaluate four core areas: behavioral/fit, technical knowledge (accounting, valuation, finance), deal and market discussion, and career motivation. Banks hire for analytical rigor, cultural fit, and the ability to synthesize complex ideas under pressure—skills that mirror high-stakes sales pitches and client calls iGotAnOffer, Indeed.
Why this matters: interviewers want evidence you can defend a model, tell a clear deal narrative, lead a team, and survive the lifestyle. Preparing with the structure of investment banking interview questions forces you to show technical command and a repeatable storytelling approach that sells your candidacy.
How do you answer behavioral investment banking interview questions using the STAR method
Behavioral investment banking interview questions probe fit, leadership, failure, teamwork, and motivation. Use STAR (Situation, Task, Action, Result) to make every answer crisp and evidence-based.
Step-by-step:
Situation: Set context in 10–20 seconds.
Task: State your role and the goal.
Action: Focus on what you did—quantify your thinking and tradeoffs.
Result: Give measurable outcomes and learning points.
Examples of common behavioral investment banking interview questions:
Tell me about yourself (use a 60–90 second narrative that links past experience to banking).
Why this bank and why investment banking (tie to specific deals, culture, or platform).
Describe a leadership example or a failure (be reflective and specific).
Practical tips:
Build a story bank of 5–7 examples (leadership, challenge, ethics, failure, impact) and quantify results when possible Street of Walls, Mergers & Inquisitions.
Practice recording yourself and time responses. For behavioral investment banking interview questions, keep answers tight: aim for 60–90 seconds for most responses and 2–3 minutes for complex stories.
Which technical investment banking interview questions should you prioritize and how do you structure answers
Technical investment banking interview questions cover accounting, valuation, finance theory, LBOs, and model mechanics. Planning a two-tier approach helps: quick explainers for phone screens, deeper walkthroughs for superday technicals.
Accounting
Be ready to walk through the three financial statements and show how a change flows through them (e.g., $10 depreciation increase: income statement expense up → net income down → retained earnings down on balance sheet; cash flow from operations adds back depreciation so cash flow rises) iGotAnOffer, Wall Street Prep.
Practice concise explanations of working capital, capex, and impairment impacts.
Valuation
Explain methods: DCF, comparable company multiples, precedent transactions.
Walk a DCF in 30–60 seconds: project unlevered FCF → discount at WACC → compute terminal value → sum to enterprise value → subtract net debt for equity value iGotAnOffer.
Understand when a DCF is less reliable (cyclical firms, startups) and when comps/precedents matter more Wall Street Prep.
Finance and LBO basics
Know cost of debt vs. cost of equity, beta intuition, and how leverage impacts returns and risk.
LBO fundamentals: sources & uses, debt tranches, exit multiple sensitivity, IRR drivers. Be prepared to sketch a 3–5 year model on paper and explain value creation levers.
Practical response format:
Start with a one-line definition.
Map out the steps or mechanics.
Finish with a brief example or sensitivity insight.
How do you prepare for deal and market investment banking interview questions and brainteasers
Interviewers ask about recent deals, industry trends, and hypothetical valuation puzzles to test commercial awareness and problem-solving.
Deal discussions
Track 2–3 recent transactions for each target bank; know the rationale, buyer/seller, multiples, and financing structure.
Use SEC filings, bank press releases, and financial press to get facts and the bank’s role Mergers & Inquisitions.
Market and brainteaser questions
Practice quick valuation puzzles: e.g., value a perpetual $100 cash flow (answer: $100 / discount rate). Explain assumptions and alternative views.
Be ready for market commentary: interest rate moves, sector consolidation, and cyclical risks. A concise macro-to-deal narrative demonstrates commercial sense.
Interview mechanics
For superdays expect back-to-back interviews that blend behavioral, technical, and market questions. Keep answers modular so you can expand when asked.
When answering deal questions, summarize the headline, state your view on value drivers, and highlight feasible risks or synergies.
What are strong questions to ask interviewers about investment banking interview questions and firm fit
Asking the right questions shows engagement and strategic thinking. Use interviewers who are seniors to gather insights on culture and progression.
High-impact questions:
What differentiates a good banker from a great one at this firm
How do you see the bank’s franchise evolving in your coverage area
What recent deal taught the team the biggest lesson
How is success measured for first-year analysts/associates
Avoid generic questions. Tie queries to a recent deal or team structure and use questions to reinforce your interest and fit Indeed.
How should non-finance majors handle technical investment banking interview questions
Non-finance majors often struggle with linking statement mechanics and with building fast intuition. Focus on practical building blocks.
Study path:
Master 3-statement mechanics until you can explain flows for depreciation, inventory changes, and financing.
Learn quick DCF skeleton: unlevered FCF → WACC → terminal value.
Build simple LBO and DCF paper models in Excel. Ten hands-on builds beats a textbook theory session iGotAnOffer, Wall Street Prep.
Practice routines:
Do 10+ mock interviews with peers or alumni; time your technical walkthroughs to 30–60 seconds for screening rounds and 3–5 minutes for deep dives.
Record yourself handling technical investment banking interview questions to refine clarity and cadence.
What are preparation strategies and actionable steps to practice investment banking interview questions daily
Turn preparation into a repeatable routine with measurable milestones.
A 30-day plan
Days 1–7: Build or refresh 3-statement accounting fundamentals and memorize key valuation concepts.
Days 8–14: Complete 5–7 DCF/LBO comps by hand and in Excel; practice articulating each step in 60 seconds.
Days 15–21: Assemble behavioral stories and rehearse STAR answers; record and refine.
Days 22–30: Mock superday runs (3–4 interviews), refine market/deal pitches, and prepare questions to ask interviewers.
Daily habits
Read WSJ/FT headlines and save 2–3 relevant deals per target bank.
Spend 20–40 minutes practicing technical walkthroughs and 15–20 minutes on behavioral stories.
Do at least one timed mock answer per day; build an error log of common slip-ups to fix.
Resources to use
Technical guides and model walkthroughs for DCF/LBO iGotAnOffer, Wall Street Prep.
Behavioral frameworks from training sites and alumni networks Street of Walls.
How do you avoid common pitfalls when answering investment banking interview questions
Candidates often fall into repeat traps. Recognize and correct these before your next screen.
Common pitfalls
Vagueness on "Why IB" or bank-specific motivations — tie answers to deals, coverage groups, or platform strengths Indeed.
Over-reliance on formulas without context — explain when to use DCF versus comps and the assumptions that drive each value Wall Street Prep.
Technical disconnects — not showing linkages across statements or mis-explaining cash flow drivers.
Ignoring lifestyle questions — be ready to discuss how you manage workload and why you want the role despite long hours.
Fixes
Practice end-to-end explainers that connect financial mechanics to commercial outcomes.
Keep a checklist for each technical answer: definition, steps, example, caveat.
Rehearse quick, honest answers on lifestyle and resilience, referencing specific time-management strategies or past experiences.
How do you tailor investment banking interview questions by level and role
Adjust depth and emphasis depending on analyst vs. associate interviews.
Entry-level focus
Prioritize 3-statement mechanics, basic DCF skeleton, comps, and a few LBO concepts.
Emphasize teamwork, punctuality, and learnability.
Associate/senior focus
Be ready for nuanced technical concepts: unlevered DCF discount rates, financing structures, covenant impacts, and complex deal modeling.
Show client interaction experience, deal sourcing, and pitching skills Mergers & Inquisitions.
Practical tailoring
For juniors, prepare short, precise answers; for seniors, prepare deeper examples and a thought-through opinion on strategic decisions.
How Can Verve AI Copilot Help You With investment banking interview questions
Verve AI Interview Copilot can shorten prep time and sharpen your answers for investment banking interview questions. Verve AI Interview Copilot simulates realistic mock interviews, provides feedback on STAR answers, and times technical walkthroughs so you hit the 60–90 second sweet spot. Use Verve AI Interview Copilot to rehearse deal discussions, build a story bank, and get tailored question lists for each bank. Try it at https://vervecopilot.com and integrate practice into your daily routine
What are the most common questions about investment banking interview questions
Q: What technical topics are tested in investment banking interview questions
A: Accounting, valuation (DCF, comps), LBOs, and basic corporate finance
Q: How long should answers to investment banking interview questions be
A: Keep behavioral answers ~60–90s and technical walkthroughs 30–90s for screens
Q: How do I show fit in investment banking interview questions
A: Tie your story to specific deals, the team, and measurable impact
Q: How many mocks before nailing investment banking interview questions
A: Aim for 10+ mocks with alumni or peers, then refine gaps
Final checklist for answering investment banking interview questions
Build a 5–7 story bank (leadership, failure, ethics, impact).
Master 3-statement flows and 30–60 second valuation walkthroughs.
Track 2–3 deals per target bank and be ready to discuss rationale.
Do 10+ mock interviews and record responses.
Tailor depth by role and always include a thoughtful question for the interviewer.
Useful further reading and resources
Technical questions and model walkthroughs at iGotAnOffer iGotAnOffer
Behavioral frameworks and question lists at Indeed Indeed
Deep interview guides and deal discussion practice at Mergers & Inquisitions Mergers & Inquisitions
Top interview question summaries at Wall Street Prep Wall Street Prep
Start with the checklist, set a 30-day plan, and iterate. With structured practice, targeted mock interviews, and a clear story bank you’ll convert your preparation into confident answers for investment banking interview questions.
