Describe a recent financial news story that caught your attention and explain its impact
Theme: Industry Knowledge Role: Investment Banker Function: Finance
Interview Question for Investment Banker: See sample answers, motivations & red flags for this common interview question. About Investment Banker: Advises clients on financial investments and deals. This role falls within the Finance function of a firm. See other interview questions & further information for this role here
Sample Answer
Example response for question delving into Industry Knowledge with the key points that need to be covered in an effective response. Customize this to your own experience with concrete examples and evidence
- Recent Financial News Story: I recently came across a news story about the merger between two major investment banks, Bank of America and Merrill Lynch. This merger was significant in the finance industry as it created one of the largest financial institutions in the world
- Impact on Investment Banking: The merger had a significant impact on the investment banking sector. It allowed Bank of America to expand its investment banking capabilities and gain a stronger foothold in the global market. Merrill Lynch, on the other hand, benefited from the financial stability and resources of Bank of America, which helped it navigate through the challenging economic environment
- Job Opportunities: The merger also created new job opportunities in the investment banking field. As the two banks integrated their operations, there was a need for skilled professionals to manage the transition and support the expanded business. This presented a favorable environment for job seekers like myself, as it indicated potential growth and demand for investment banking professionals
- Market Reaction: The news of the merger had a significant impact on the stock market. Initially, there was a positive reaction, with both Bank of America and Merrill Lynch's stock prices experiencing a surge. However, as the financial crisis unfolded, the market sentiment turned negative, leading to a decline in stock prices for both banks. This highlighted the vulnerability of financial institutions during times of economic uncertainty
Underlying Motivations
What the Interviewer is trying to find out about you and your experiences through this question
- Current awareness: To assess if the candidate is up-to-date with recent financial news and trends
- Analytical skills: To evaluate the candidate's ability to analyze and understand the impact of financial news
- Industry knowledge: To gauge the candidate's understanding of the investment banking industry and its current events
- Communication skills: To observe how effectively the candidate can articulate complex financial concepts and their implications
Potential Minefields
How to avoid some common minefields when answering this question in order to not raise any red flags
- Lack of knowledge: Not being aware of any recent financial news story or not being able to provide a specific example
- Irrelevant or outdated news: Mentioning a news story that is not recent or not relevant to the finance industry
- Inability to explain impact: Failing to articulate the significance or implications of the chosen news story
- Bias or controversial views: Expressing biased opinions or controversial views related to the news story
- Inaccurate or incomplete information: Providing incorrect or incomplete details about the news story or its impact