vault-finance practice guide

Download Vault-Finance Practice Guide

Post on 05-Dec-2015

6 views

Category:

Documents

0 download

Embed Size (px)

DESCRIPTION

finance

TRANSCRIPT

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    2002 Vault Inc.

    FINANNTERVPRAC

    VAULT FINANCEINTERVIEWSPRACTICEGUIDE

    DAVID MONTOYA AND THE STAFF OF VAULT

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    Copyright 2002 by Vault Inc. All rights reserved.

    All information in this book is subject to change without notice. Vault makes no claims as tothe accuracy and reliability of the information contained within and disclaims all warranties.No part of this book may be reproduced or transmitted in any form or by any means,electronic or mechanical, for any purpose, without the express written permission of Vault Inc.

    Vault, the Vault logo, and the insider career networkTM are trademarks of Vault Inc.

    For information about permission to reproduce selections from this book, contact Vault Inc.,150 W. 22nd St., 5th Floor, New York, New York 10011, (212) 366-4212.

    Library of Congress CIP Data is available.

    ISBN 1-58131-170-2

    Printed in the United States of America

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    ACKNOWLEDGEMENTS

    Vault would like to acknowledge the assistance and support of MattDoull, Ahmad Al-Khaled, Lee Black, Eric Ober, Hollinger Ventures,Tekbanc, New York City Investment Fund, American Lawyer Media,Globix, Hoover's, Glenn Fischer, Mark Fernandez, Ravi Mhatre, CarterWeiss, Ken Cron, Ed Somekh, Isidore Mayrock, Zahi Khouri, SanaSabbagh and other Vault investors. Many thanks to our loving familiesand friends.

    Special thanks to Deborah Adeyanju and Evan Cohen. Thanks also toH.S. Hamadeh, Val Hadjiyski, Marcy Lerner, Chris Prior, RobSchipano, Ed Shen, and Tyya N. Turner and the rest of the Vault stafffor their support.

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    Vault Finance Interviews Practice Guide

    Table of Contents

    INTRODUCTION 1

    Practice Makes Perfect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

    Fit Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

    Sample Fit Questions and Answers . . . . . . . . . . . . . . . . . . . . . . .6

    Commonly Asked Basic Finance Questions . . . . . . . . . . . . . . . . . .8

    CORPORATE FINANCE AND M&A 17

    Skills for Corporate Finance/M&A . . . . . . . . . . . . . . . . . . . . . . . .19

    Corporate Finance/M&A Questions . . . . . . . . . . . . . . . . . . . . . . .21

    SALES & TRADING 69

    Skills for Sales & Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71

    Sales & Trading Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73

    RESEARCH/INVESTMENTMANAGEMENT 89

    Skills for Research and Investment Management . . . . . . . . . . . . .91

    Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94

    FINANCE GLOSSARY 113

    Visit the Vault Finance Career Channel at http://finance.vault.com with insider firm profiles, message boards, the Vault Finance Job Board and more. xiC A R E E RL I B R A R Y

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    Visit the Vault Finance Career Channel at http://finance.vault.com with insider firm profiles, message boards, the Vault Finance Job Board and more. 1CC AA RR EE EE RRLL II BB RR AA RR YY

    FINANINTERVPRAC

    INTRODUCTION

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    InvestmentBanking/CorporateFinance Interview Prep

    This session preps you forquestions about:

    Mergers & acquisitions

    Valuation models

    Accounting concepts

    Personality fit for investmentbanking and corporate financepositions

    And more!

    Sales & TradingInterview Prep

    This session prepares you forquestions about:

    Capital markets

    Macroeconomics, including impactof different pieces of economicdata on securities prices

    Trading strategies

    Interest rates

    Securities including equities, fixedincome, currencies, options, andother derivatives

    Personality fit for sales & tradingpositions

    And more!

    Vault brings you a new service tohelp you prepare for your financeinterviews. Your 1-hour livesession with a Vault financeexpert will include an actual 30-minute finance interview, whichwill be immediately followed by a30-minute critique and Q&A sessionwith your expert.

    Vault Live FinanceInterview Prep

    Do you have an interview comingup with a financial institution?

    Unsure how to handlea finance Interview?

    For more information go tohttp://finance.vault.com

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    Practice Makes Perfect

    This book is designed to supplement the Vault Guide to Finance Interviews. Werecommend that you purchase and read that book before reading this one, especiallyif you have little or no familiarity with finance or the financial services industry.

    We have compiled a list of actual questions asked during finance interviews,along with some suggested answers. Its important to stress that these aresuggested answers we dont recommend that you memorize and recite theresponses we have provided verbatim. Rather, you should use these for reference.

    A guide to this guide

    Finance interviews are sometimes conducted by members of the HR team,sometimes by line professionals (i.e. actual bankers, traders, or financedepartment members), and occasionally by various combinations of HR and lineprofessionals in team interview situations.

    While there is certainly overlap among the type of questions asked in a particulartype of interview, we have organized this guide and the questions into four broadcategories.

    Fit questions and general finance questions. These questions, found inthis Introduction chapter, are commonly asked of all finance interviewcandidates. They are intended to test a jobseekers basic level of fitnessfor a finance position in terms of temperament, interest in financial markets,and basic finance knowledge.

    Corporate finance/M&A questions. These questions are those commonlyfaced in investment banking interviews, as well as those found in interviewsfor an internal corporate finance position. This section will be helpful forthose pursuing a career in commercial banking as well.

    Sales & trading questions. These questions are applicable to both the sell-side and the buy-side.

    Research/investment management questions. These questions are thosethat one might field both on the buy- and sell-side for a research position.

    You may want to browse through more than one of these sections. If you arepursuing a position at a hedge fund, for example, you may find that your positionwill entail some trading AND research. A general management program at anasset management firm or a rating agency might require some knowledge of all

    Vault Finance Interviews Practice Guide

    Introduction

    Visit the Vault Finance Career Channel at http://finance.vault.com with insider firm profiles, message boards, the Vault Finance Job Board and more. 3CC AA RR EE EE RRLL II BB RR AA RR YY

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    of the above subjects, and so forth. Also, we stress that these categories are basicgroupings that reflect the likelihood of a question being asked in a specific typeof interview you may encounter any of these questions in any financeinterview, depending on what financial product youre likely to be working with(fixed income vs. equity vs. derivatives, etc.) and how frisky your interviewer isfeeling.

    The vast majority of the questions in this guide are finance-related (technical)questions that youd receive in an interview with a line professional. However,we stress that preparing for fit questions is vital in some interviews, evenwith finance professionals, you may face a greater proportion of these so-calledbehavioral questions. Samples of these questions begin on the next page.

    Vault Finance Interviews Practice Guide

    Introduction

    2002 Vault Inc.4 CC AA RR EE EE RRLL II BB RR AA RR YY

  • Custo

    mize

    d fo

    r: Ja

    son

    (jas

    on.b

    arqu

    ero@

    cgu.

    edu)

    Fit Questions

    Below are some of the most commonly asked fit questions, all of which youshould think about before you go into your interviews.

    1. Why did you choose to go to _____ college or university?

    2. Why did you major in _____?

    3. What was your overall GPA (if not on resume)? What was yourSAT/GMAT?

    4. What courses did you do the best/worse in?

    5. Tell me about your college/grad school experience.

    6. What appeals to you about this position?

    7. Why would you be a good choice for this position? Why should we hireyou?

    8. What do you think this position requires, and how well do you matchthose requirements?

    9. Why did you leave your last position?

    10. What did you learn about yourself at your last job?

    11. Describe the most relevant and specific items in your background thatshow that you are qualified for this job.

    12. What matters most to you in your next position?