Investment Banking Technical Questions

How to Answer Technical Questions for an Investment Banking Internship

Some people may say you don’t need to learn technicals but I say they’re wrong. Again, yes you can get lucky and not come across a particularly technical interview, but you need to prepare for every eventuality because, in such a brutally competitive field, the numbers game means you need all bases covered. For spring week interviews this area is less important, but it is almost a given that eventually you will be asked technical questions for summer internship applications.

Before delving into the suggested guides, remember that the key here is consistency. Whether it is 1 hour per day, or if you are under a lot of pressure and have left technical preparation a bit late, or even more hours per day, you need to develop a habit out of this. By the way, if you’re someone that struggles with habits, I strongly recommend Atomic Habits by James Clear as I wish I had read this during application season rather than towards the end of it.

[2 Options]

  • Rosenbaum & Pearl book. This is probably the most in-depth book on the topic but do not get overwhelmed as I only know a few firms e.g. PWP or PJT where such in-depth knowledge might be helpful. Having said this, finding a way to stand out is very important and reading this book could be your chance to do that but I still believe the 400Qs guide is the best place to begin and then undertaking a more time efficient M&A/modelling course before this extensive book. Rosenbaum & Pearl also created a workbook – active recall is your best bet with technicals and the workbook would faciliate this well.
  • 400 Qs guide from BIWS – you can find older versions online or buy their most up to date version on the breaking into wallstreet website. This guide is excellent because it forces active recall, is concise and prevents you from wasting time on unnecessary components that will probably never come up – i.e. it is very tailored to investment banking.

There are other options like the Andrew Gutman book which is titled “How to be an investment banker” and this is great if you’re completely new to the industry and want a deeper understanding of investment banking as a whole which is beyond the scope of this game plan. Either way, I would recommend regularly revisiting why you want to join the industry in the first place.

I’m going to focus on the 400Qs guide because although I recommend going deep with the P&R book as it will pay dividends in the future, or deepening your understanding with the Andrew Gutman book, you may not have a lot of time and there are many other components to get under control as well so in light of efficiency, I think this is the best approach.

By typing “400Qs guide BIWS” into google, the first result that comes up is the pdf guide (it might appear as the 200Qs guide but this should still do the trick for technicals). When you see this, you can scroll to the contents page and you’ll find different components laid out:

[Go for the basic section within each component since there is a lot of information to cover and the advanced section very rarely comes up in interviews at least from mine and others’ experiences.]

  • Accounting
  • Enterprise/Equity value
  • Valuation
  • DCF
  • Merger model
  • LBO

Just a few notes regarding the above list:

  • For the Merger Model section, I don’t know anyone that has been asked about a merger model in their interviews, but do not neglect this section completely because there are some important foundation level questions such as why would a company want to merge in the first place that should be covered.
  • You may be tempted to skip the LBO section because again, it is less likely to come up, but I urge you not to because sometimes if you are given an LBO banker as your interviewer, it is highly likely that any technicals they will ask will be LBO questions. I had this with my Bank of America interview, but rest assured, because every single question they asked was covered in the 400Qs guide basic section.

Remember that you can’t learn this content superficially – this isn’t an open-book exam or multiple choice test, but an interview and you need to recall the information and problem solve comfortably under pressure which requires familiarity with the material. As this process of learning can be exhausting at first (although can equally be interesting) here are some tips to make your life easier:

  • Form a study group. I used to do a 2-way mock interview with a friend where we’d quiz each other from the guide for 10 minutes each, once a week which built a level of accountability and consistency.
  • Make the most of active recall… this is why the resource I recommend starting on is a question guide and why I included the Rosenbaum and Pearl workbook as well as their main book.
  • Make diagrams to visualize the concepts from the 400Qs guide and as soon as you possibly can, actively recall. Don’t just copy the information, recall it and do it out loud like you will be doing in the actual interview. I began drawing diagrams to learn the initial concepts before consolidation. There are many ways to remember information more quickly during the initial learning phase and see this video on YouTube for one idea. I also recommend reading Make it Stick which has very effective suggestions e.g. ‘memory palaces’ for digesting large amounts of information.

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