Banking Interview Query With An Reply – What Would You Do If I Gave You $100,000?
“If I gave you $100,000 now, what would you do with it?” Ah the traditional “does this child have a mind?” query. It should be one of many best interview questions in funding banking you will nonetheless have enjoyable as soon as you determine your 5 half reply.
However to crush it it’s important to keep away from the one response error what about 2/3 of the scholars earn; they suppose the banker is asking them what they would do with the $100,000 if they’d it personally.
And though the query appears to be directed at you and your private state of affairs, it isn’t. Neither is it aimed on the banker who’s questioning you.
How are you presupposed to deal with this difficulty then? As a budding marketing consultant, you will need to first reply this query with a query
“Who’s the investor and what are their goals, danger profile, and so on.?”
Sure, it is true. Put in your $60,000 a 12 months monetary planner hat and ask about the kind of return legendary investor needs, money wants over time, private tax state of affairs, most well-liked asset lessons, most well-liked industries, and so on.
PS In contrast to administration consulting case interviews, do not count on a banker to give you that a lot extra data – 2 or 3 factors and so they’re often over. That is in spite of everything solely a small query in interviews with funding banks.
Primarily based on this new data, you possibly can clarify what you’d do. Suggesting an funding technique that even remotely takes into consideration this new data will get you an A right here.
If you wish to convey your reply to an A+ stage…
- Assemble a diversified portfolio shares, bonds, actual property, money and different various asset lessons. College students who fail to mix asset lessons and as an alternative solely give you one in an “Oh, danger averse, then I will make investments the cash in bonds” model, are fools. This can be a simple funding technique with zero ounces of economic finesse – completely different asset lessons provide completely different danger/returns/money movement/tax penalties and so on, so combine and match with that in thoughts .
- Point out what number of of every in Quantities in $not % – it is a small level, however it could actually make an enormous distinction for bankers.
- And clarify allowances use the investor’s private data – specifically their danger profile, revenue wants over time, way of life objectives and private tax state of affairs.
However when all is alleged and achieved, do not be so subtle how confused you might be! You marvel out loud “Oh, however wait, perhaps…” as in case your creepy Drew Barrymore would destroy all of your laborious work straight away.
PS If the bankers flip round and say the legendary investor is definitely you – and so what would you do with $100,000 – use the identical response technique as above, however adapt it to your youthful state of affairs. Trace: a time horizon of greater than 40 years = heavy shares!