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Stress Interview Questions for Investment Banking

Why Does the Stress Interview Exist?

Investment banking interviews are stressful enough as is – however, it is popular to have a stress portion that tests a candidate’s mental fortitude by putting him/her on the spot (albeit less popular than before the financial crisis due to the industry’s public relations to appear warmer). Or, the interviewer is having a bad day/is a jerk.

Stress questions can come up at any time during the interview, including having an interviewer switch gears from being pleasant to being hostile on a whim.

Investment banking is inherently a stressful job – there are tight deadlines, difficult personalities to manage both upstream and downstream, numerous uncertainties and various situations where serious judgment calls must be made – even at the junior level.

A lot of people crack after the last straw hits the camel’s back and workforce attrition rates are very high (sometimes entire analyst classes leave shortly after bonus), so stress interviews are somewhat warranted to make sure analyst and associate intake will be calm under pressure.

What Does an Interviewee Responding to Stressful Questions Tell the Interviewer?

Stressful questions show the candidate’s true composure – Everyone has read the investment banking interview guides and can recite them in a polished manner; stress questions take away the structured answers that are rehearsed.

Additionally, there are a lot of times on the job where something cannot be done, and professionals have to find a way to get the messaging right and communicate what is going on to various parties in a diplomatic fashion. Working with the right answer is easy. Coming up with a workable solution when there is no obvious answer is more challenging.

Exhibit A

Johnny: … and therefore it is 34.7% accretive to EPS.

VP: Great job walking through that advanced accretion/dilution math. Hey Johnny, tell me a joke.

Johnny: OK, there are two Porches driving in opposite directions…

VP: I’ve heard that one, it’s lame. Tell me another joke.

Johnny: OK, so a guy walks into a bar…

VP: I don’t like bar jokes. Johnny, I don’t like you.

If Johnny’s heart rate rises and he starts to speak faster, slur his words and make grammatical errors, he is doing badly in this part of the interview.

Stress questions do not necessarily have a right answer – rather they solicit an indication that you can remain poised and professional when facing an adverse situation. This is not to say you will not get called out for a stupid or blatantly incorrect answer.

Gone are the days of investment bankers asking candidates to open a window that cannot be opened, starting the interview by yelling at the interviewee, or making someone wait for 45 minutes after the arranged time, but these questions are still fair game:

Sample Stress Interview Questions/Requests

Tell me a joke

You have to have a list of jokes that are somewhat funny but inoffensive (especially in today’s corporate environment). Sometimes, even if the joke is very funny, you may be stonewalled by the interviewer to further stress you out.

Walk me through your grades

This is an easier question if you have good grades. If you have bad grades, you will have to come up with good reasons as to why.

  1. Bad grades because of split responsibilities: working 3 jobs to support family and pay tuition
  2. Bad grades overall but a rosier story underneath: I was irresponsible and failed creative writing but have 90%+ in all of my finance and accounting courses… I’ve learned from this mistake and better prioritize my time… I always give 100% now.
  3. Bad grades period but am capable: I have passed all three levels of the CFA exam while getting a top performance review in my current commercial banking job while managing a large family portfolio of stocks.

However, good grades are not exempt from questioning, although questions will take a different line.

  1. Your GPA is 3.7. The other guy we are interviewing has 4.0. We’re going to just hire him.
  2. I see that you got 100% in macroeconomics. Do you think you’re really good at macroeconomics? Can you explain this multifactor model?
  3. 9 GPA, not bad. But you went to Rotman/School A, that’s like a 3.2 at Ivey/School B. (getting angry and yelling “no it’s not” is not an appropriate response)

Why should we hire you over everyone else?

This is basically an outline of your strengths.

The interviewer may follow up with “is that it?” A svelte way of dealing with this is to say “[laugh], well how much time do you have?”

How do you know you can handle the hours?

A good answer requires historical examples/lies of how you were able to cope with abnormal work conditions to get something important done.

Be honest, and I’ll know if it’s BS, what’s a weakness of yours?

This is a more aggressive variant of the standard weaknesses question.

Also, there are the standard brain teasers.

A Word of Caution for Interviewers Who Rub You the Wrong Way

We would caveat that there is a distinction between legitimate stress questions and an ornery interviewer. If you are getting bad vibes from the person across the table, should you have other options (other offers or you are interviewing out of your current job) it may be prudent to decline an offer. In most cases from personal experience, if you do not like someone during the interview, you will not like them when you are stuck with them. It goes both ways.

Related Reading for Investment Banking Recruiting

Investment BankingElite Boutique Investment Banks Versus Bulge Bracket Investment Banks · Introduction to Fairness Opinions · Investment Banking Fee Study · Investment Banking for Dummies · What Do Investment Bankers Mean When They Say “Sell Side” or “Buy Side”? · Should You Start Your Investment Banking Job Early? · Why Investment Banking? · Breaking into Investment Banking as a Big 4 Accountant in Audit · Activist Shareholder Defense · Investment Banking in Canada · Investment Banking Hierarchy – Analyst to Managing Director · How Has Investment Banking Changed Over Time? ·
NetworkingDo I Need Social Skills to Work in Investment Banking? · Investment Banking Information Sessions · Encouragement before Full-Time Recruiting for 2018 · How to Not Get Blacklisted from Investment Banking Recruiting · How to Show Your Passion for Finance · Walk Me Through a DCF · Investment Banking Resume Observations · Coffee Chats and Informational Interviews ·
ex investment banking associate

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