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Breaking into Investment Banking: How to Ace Your GRE

Written by an engineer with a 333 on the GRE (163 Verbal, 170 Quantitative)

If you are looking to break into investment banking or trading, an undergraduate degree in business, commerce or economics is typically the best way to do it. If you already have a university degree in another field (and are presumably working in said field), you will most likely need more school. Sure, there are cases where strategic networking or good luck can land you an interview, but those are far and few in between. Even if you do get an interview, your chances of getting through are low — hiring a non-traditional candidate is risky on the part of the MD (if you perform poorly he will look bad).

You have a few choices with regard to programs:

  1. Masters of Business Administration
  2. Masters of Financial Economics or similar programs
  3. Masters of Finance or similar programs
  4. Masters of Financial Engineering or similar programs
  5. Masters in your undergraduate specialization (Engineering, Science, Economics etc)
  6. Second Bachelor’s of Business Administration or similar programs

The most popular program is the MBA, and in most cases it is the best way to break into banking. However, select graduate programs like Masters of Financial Economics can be just as good, if not better. Regardless of the graduate program you decide on, you want to choose the most competitive university you can, ideally close to the financial center of your country (Toronto for Canada, New York for the US etc). To get into a competitive program, you would need the following:

  • Competitive GPA – at least 3.0 on a 4.0 scale
  • Competitive GRE or GMAT – this depends on school
  • Good work experience – Big 4 if you are an accountant etc.
  • Good references – Build rapport with your professors and/or supervisors
  • Good application essay

Why not GMAT?

Although the GRE is accepted by fewer MBA programs, it is much more flexible in that it is also used in admissions for other graduate programs. Most of the top MBA programs accept the GRE as well as the GMAT (INSEAD being an exception). As it is prudent to apply to as many programs as you can, GRE allows you to mitigate some risks. Notable non-MBA programs that place well in finance are, but not limited to: Rotman MFE, Columbia MSFE, Princeton MFin.

In terms of difficulty, the 2 exams are comparable. GRE Math is slightly easier, and GRE Verbal focuses more on vocab as opposed to grammar. For non-native English speakers, you may want to opt for the GRE as vocab is easier to cram for than grammar.

How Good is Good?

The GRE has a verbal reasoning section, a quantitative reasoning section and an analytical writing section. the score can range from 130 to 170 for the first 2 sections, and 0 to 6 for the writing section.

A good GRE score depends on the school and program you are trying to get into. If your goal is a top 50 MBA, 150/150 (300 overall) might be considered good, but if you are trying to get into Harvard Business School, that would be considered poor. You can typically infer the required GRE/GMAT score from the class profile for the specific program. For example, the class profile for MBA at Rotman for 2018 (University of Toronto) has an average GMAT score of 665. Using the GRE to GMAT conversion tool provided by ETS, you can see that equates to 322 to 323 on the GRE (verbal and quantitative combined). It goes on to break it down further — 80% of its class has a GMAT score between 560 to 740, or 302 to 328 on the GRE. This means you should be aiming for 328 if you have a poor GPA and/or poor work experience.

We broke down the GMAT/GRE requirements for the top MBAs for finance below:

Top Canadian MBAs

School Average GPA Average GRE Score Average GMAT Score
Rotman MBA (University of Toronto) 3.5 322 665
Ivey MBA (Western University) 323 667
Schulich MBA (York University) 3 322 663
Queen’s MBA (Queen’s University) 321 650
Desautel MBA (McGill University) 325* 690*

Top US MBAs

School Average GPA Average GRE Score Average GMAT Score
Stanford MBA (Stanford University) 3.74 331 737
Wharton MBA (University of Pennsylvania) 3.6 325 730
Booth MBA (University of Chicago) 3.6 330 730
Harvard MBA (Harvard University) 3.71 328 730
Stern MBA (New York University) 3.48 328 714

*average score estimated from the midpoint of the range provided by the school

How to Ace Your GRE

Start Reviewing Early

With both the GRE and the GMAT, you can write the test however many times you want to write it, so writing it early (well before your application deadline) gives you the most flexibility if you do poorer than you expect on the test. Both GRE and GMAT are valid for 5 years, so there is no reason why you should wait to write it. The costs to write the test are minimal compared to the earnings potential of a good score, but if you are worried there are ways to lower the test fees.

Do the Test Multiple Times

Everyone wants to do well on the first try, I did as well. We all want to prove that we are as smart as we think we are. However, there is an element of randomness that we cannot control here, namely the test questions may not match up well with the practice questions you prepared on. Do not be afraid to do the test multiple times if you did not achieve the ideal score on your first try.

Prepare Smart

As with any tests, the key to a good score on the GRE or GMAT is not only to prepare well, but to prepare smart. You are probably familiar with 75% of the topics on the GRE, so do not spend too much time reviewing every single topic. Start by doing some practice questions to identify your weaknesses, then focus on those topics to review.

As ETS does not release the GRE questions from previous years, they are the only source for the most representative questions. GRE the Official Guide is a must have – it comes with reading material, practice questions and 2 practice tests. The 2 online tests mentioned on the book cover is actually available to all test takers, you get access to that when you sign up for the GRE.

To supplement the official guide, there are a myriad of test preparation services available on the market – Manhattan, Kaplan, Princeton, Magoosh etc. Everyone has different methods that suit their personally studying habits, but personally I found videos to be the most effective way to go through the material. For the verbal section, using apps like Flashcards or Magoosh GREVocabulary allows you to study on the go.

How I Prepared for the GRE

I used Magoosh for the brunt of my studying efforts, and I found the questions to be relatively similar to the actual test questions, if not harder (especially the “very hard” questions). I also found the score prediction tool they had to be accurate, mine was 160-165 for verbal and 164-168 for quantitative.

I also used the Official Guide, PowerPrep Practice Exams, and wrote the free Manhattan Test. I thought the Official Guide was slightly easier than the actual test, the PowerPrep Exams on par with the actual test, and the Manhattan test to be harder than the test, although this may differ from test to test. The free Manhattan test was helpful — not only did it bolster my vocabulary, it also provided a neat diagnostic tool to help you pinpoint the areas you are weak in. I’d imagine the other Manhattan practice exams may be worth purchasing, if you feel under-prepared.

Reading comprehension is a little bit harder to prepare for. What I did for these sections is to read voraciously — newspapers, journal articles, non-fiction books, etc. For newspapers, I would recommend Financial Times, New Yorker, New York Times, etc. The passages in reading comprehension covers diverse topics like biology, anthropology and finance, knowing a bit about each topic helps you navigate through the technical jargon.

I have the same advice for analytical writing — read read read! If you are not a natural writer like me, start by emulating the styles of established journalists or writers. Try not to use the 5 paragraph introduction, arguments 1 to 3, conclusion format. When taking a position on an issue, a good strategy is to recognize the merits of the opposing position, then describe how those merits may be irrelevant or marginal. Whenever I did the practice exams, I always made sure to not skip the writing sections before the multiple choice, even though its tempting as I know the writing sections cannot be marked. You want to simulate real test conditions as close as possible.

On the day of the test, don’t drink too much water or coffee. You only get one 10-minute break, and that comes after 2 analytical writing sections and 2 multiple choice sections (roughly 2 hours). There may be 1 experimental section that will not count toward your score, so try not panic if you think you did poorly in one section.

If you have any other questions about the GRE test or how I prepared, please leave a comment below! Otherwise, good luck on your test!

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