Networking Interview Questions

1. What are 10Base2, 10Base5 and 10BaseT Ethernet LANs
10Base2—An Ethernet term meaning a maximum transfer rate of 10 Megabits per second that uses baseband
signaling, with a contiguous cable segment length of 100
meters and a maximum of 2 segments.
10Base5—An Ethernet term meaning a maximum transfer rate of 10 Megabits per second that uses baseband
signaling, with 5 continuous segments not exceeding 100
meters per segment.
10BaseT—An Ethernet term meaning a maximum transfer rate of 10 Megabits per second that uses baseband
signaling and twisted pair cabling.

2. Explain the difference between an unspecified passive open and a fully specified passive open
An unspecified passive open has the server waiting for a connection request from a client. A fully specified passive
open has the server waiting for a connection from a
specific client.

3. Explain the function of Transmission Control Block
A TCB is a complex data structure that contains a considerable amount of information about each connection.

4. Explain a Management Information Base (MIB)
A Management Information Base is part of every SNMP-managed device. Each SNMP agent has the MIB database that
contains information about the device's status, its
performance, connections, and configuration. The MIB is queried by SNMP.

5. Explain anonymous FTP and why would you use it
Anonymous FTP enables users to connect to a host without using a valid login and password. Usually, anonymous FTP
uses a login called anonymous or guest, with the
password usually requesting the user's ID for tracking purposes only. Anonymous FTP is used to enable a large number
of users to access files on the host without having
to go to the trouble of setting up logins for them all. Anonymous FTP systems usually have strict controls over the areas
an anonymous user can access.

6. Explain a pseudo tty
A pseudo tty or false terminal enables external machines to connect through Telnet or rlogin. Without a pseudo tty, no
connection can take place.

7. Explain REX
What advantage does REX offer other similar utilities

8. What does the Mount protocol do
The Mount protocol returns a file handle and the name of the file system in which a requested file resides. The message
is sent to the client from the server after reception
of a client's request.

9. Explain External Data Representation
External Data Representation is a method of encoding data within an RPC message, used to ensure that the data is not
system-dependent.

10. Explain the Network Time Protocol ?

11. BOOTP helps a diskless workstation boot. How does it get a message to the network looking for its IP address and the location of its operating system boot files
BOOTP sends a UDP message with a subnetwork broadcast address and waits for a reply from a server that gives it the IP address. The same message might contain the name of the machine that has the boot files on it. If the boot image location is not specified, the workstation sends another UDP message to query the server.


12. Explain a DNS resource record
A resource record is an entry in a name server's database. There are several types of resource records used, including name-to-address resolution information. Resource records are maintained as ASCII files.

13. What protocol is used by DNS name servers
DNS uses UDP for communication between servers. It is a better choice than TCP because of the improved speed a connectionless protocol offers. Of course, transmission reliability suffers with UDP.

14. Explain the difference between interior and exterior neighbor gateways
Interior gateways connect LANs of one organization, whereas exterior gateways connect the organization to the outside world.

15. Explain the HELLO protocol used for
The HELLO protocol uses time instead of distance to determine optimal routing. It is an alternative to the Routing Information Protocol.

16. What are the advantages and disadvantages of the three types of routing tables
The three types of routing tables are fixed, dynamic, and fixed central. The fixed table must be manually modified every time there is a change. A dynamic table changes its information based on network traffic, reducing the amount of manual maintenance. A fixed central table lets a manager modify only one table, which is then read by other devices. The fixed central table reduces the need to update each machine's table, as with the fixed table. Usually a dynamic table causes the fewest problems for a network
administrator, although the table's contents can change without the administrator being aware of the change.

17. Explain a TCP connection table

18. Explain source route
It is a sequence of IP addresses identifying the route a datagram must follow. A source route may
optionally be included in an IP datagram header.

19. Explain RIP (Routing Information Protocol)
It is a simple protocol used to exchange information between the routers.

20. Explain SLIP (Serial Line Interface Protocol)
It is a very simple protocol used for transmission of IP datagrams across a serial line.

21. Explain Proxy ARP
It is using a router to answer ARP requests. This will be done when the originating host believes that a destination is local, when in fact is lies beyond router.

22. Explain OSPF
It is an Internet routing protocol that scales well, can route traffic along multiple paths, and uses knowledge of an Internet's topology to make accurate routing decisions.

23. Explain Kerberos
It is an authentication service developed at the Massachusetts Institute of Technology. Kerberos uses encryption to prevent intruders from discovering passwords and gaining unauthorized access to files.

24. Explain a Multi-homed Host
It is a host that has a multiple network interfaces and that requires multiple IP addresses is called as a Multi-homed Host.

25. Explain NVT (Network Virtual Terminal)
It is a set of rules defining a very simple virtual terminal interaction. The NVT is used in the start of a Telnet session.

26. Explain Gateway-to-Gateway protocol
It is a protocol formerly used to exchange routing information between Internet core routers.

27. Explain BGP (Border Gateway Protocol)
It is a protocol used to advertise the set of networks that can be reached with in an autonomous system. BGP enables this information to be shared with the autonomous system. This is newer than EGP (Exterior Gateway Protocol).

28. Explain autonomous system
It is a collection of routers under the control of a single administrative authority and that uses a common Interior Gateway Protocol.

29. Explain EGP (Exterior Gateway Protocol)
It is the protocol the routers in neighboring autonomous systems use to identify the set of networks that can be reached
within or via each autonomous system.

30. Explain IGP (Interior Gateway Protocol)
It is any routing protocol used within an autonomous system.

31. Explain Mail Gateway
It is a system that performs a protocol translation between different electronic mail delivery protocols.

32. Explain wide-mouth frog
Wide-mouth frog is the simplest known key distribution center (KDC) authentication protocol.

33. What are Digrams and Trigrams
The most common two letter combinations are called as digrams. e.g. th, in, er, re and an. The most common three letter combinations are called as trigrams. e.g. the, ing, and, and ion.

34. Explain silly window syndrome
It is a problem that can ruin TCP performance. This problem occurs when data are passed to the sending TCP entity in large blocks, but an interactive application on the receiving side reads 1 byte at a time.

35. Explain region
When hierarchical routing is used, the routers are divided into what we call regions, with each router knowing all the details about how to route packets to destinations within its own region, but knowing nothing about the internal structure of other regions.

36. Explain multicast routing
Sending a message to a group is called multicasting, and its routing algorithm is called multicast routing.

37. Explain traffic shaping
One of the main causes of congestion is that traffic is often busy. If hosts could be made to transmit at a uniform rate, congestion would be less common. Another open loop method to help manage congestion is forcing the packet to be transmitted at a more predictable rate. This is called traffic shaping.

38. Explain packet filter
Packet filter is a standard router equipped with some extra functionality. The extra functionality allows every incoming or outgoing packet to be inspected. Packets meeting some criterion are forwarded normally. Those that fail the test are dropped.

39. Explain virtual path
Along any transmission path from a given source to a given destination, a group of virtual circuits can be grouped together into what is called path.

40. Explain virtual channel
Virtual channel is normally a connection from one source to one destination, although multicast connections are also permitted. The other name for virtual channel is virtual circuit.

41. Explain logical link control
One of two sublayers of the data link layer of OSI reference model, as defined by the IEEE 802 standard. This sublayer is responsible for maintaining the link between computers when they are sending data across the physical network connection.

42. Why should you care about the OSI Reference Model
It provides a framework for discussing network operations and design.

43. Explain the difference between routable and non- routable protocols
Routable protocols can work with a router and can be used to build large networks. Non-Routable protocols are designed to work on small, local networks and cannot be used with a router
44. Explain MAU
In token Ring , hub is called Multistation Access Unit(MAU).

45. Explain 5-4-3 rule
In a Ethernet network, between any two points on the network, there can be no more than five network segments or four repeaters, and of those five segments only three of segments can be populated.

46. Explain the difference between TFTP and FTP application layer protocols
The Trivial File Transfer Protocol (TFTP) allows a local host to obtain files from a remote host but does not provide reliability or security. It uses the fundamental packet delivery services offered by UDP.
The File Transfer Protocol (FTP) is the standard mechanism provided by TCP / IP for copying a file from one host to another. It uses the services offered by TCP and so is reliable and secure. It establishes two connections (virtual circuits) between the hosts, one for data transfer and another for control information.

47. Explain the range of addresses in the classes of internet addresses
Class A 0.0.0.0 - 127.255.255.255
Class B 128.0.0.0 - 191.255.255.255
Class C 192.0.0.0 - 223.255.255.255
Class D 224.0.0.0 - 239.255.255.255
Class E 240.0.0.0 - 247.255.255.255

48. Explain the minimum and maximum length of the header in the TCP segment and IP datagram
The header should have a minimum length of 20 bytes and can have a maximum length of 60 bytes.

49. Explain difference between ARP and RARP
The address resolution protocol (ARP) is used to associate the 32 bit IP address with the 48 bit physical address, used by a host or a router to find the physical address of another host on its network by sending a ARP query packet that includes the IP address of the receiver. The reverse address resolution protocol (RARP) allows a host to discover its Internet address when it knows only its physical address.

50. Explain ICMP
ICMP is Internet Control Message Protocol, a network layer protocol of the TCP/IP suite used by hosts and gateways to send notification of datagram problems back to the sender. It uses the echo test / reply to test whether a destination is reachable and responding. It also handles both control and error messages.

51. What are the data units at different layers of the TCP / IP protocol suite
The data unit created at the application layer is called a message, at the transport layer the data unit created is called either a segment or an user datagram, at the network layer the data unit created is called the datagram, at the data link layer the datagram is encapsulated in to a frame and
finally transmitted as signals along the transmission media.

52. Explain Project 802
It is a project started by IEEE to set standards that enable intercommunication between equipment from a variety of manufacturers. It is a way for specifying functions of the physical layer, the data link layer and to some extent the network layer to allow for interconnectivity of major LAN protocols.
It consists of the following:
802.1 is an internetworking standard for compatibility of different LANs and MANs across protocols.
802.2 Logical link control (LLC) is the upper sublayer of the data link layer which is non-architecture-specific, that is remains the same for all IEEE-defined LANs.
Media access control (MAC) is the lower sublayer of the data link layer that contains some distinct modules each carrying proprietary information specific to the LAN product being used. The modules are Ethernet LAN (802.3), Token ring LAN (802.4), Token bus LAN (802.5).
802.6 is distributed queue dual bus (DQDB) designed to be used in MANs.

53. Explain Bandwidth
Every line has an upper limit and a lower limit on the frequency of signals it can carry. This limited range is called the bandwidth.

54. Difference between bit rate and baud rate.
Bit rate is the number of bits transmitted during one second whereas baud rate refers to the number of signal units per second that are required to represent those bits. baud rate = bit rate / N where N is no-of-bits represented by each signal shift.

55. Explain MAC address
The address for a device as it is identified at the Media Access Control (MAC) layer in the network architecture. MAC address is usually stored in ROM on the network adapter card and is unique.

56. Explain attenuation
The degeneration of a signal over distance on a network cable is called attenuation.

57. Explain cladding
A layer of a glass surrounding the center fiber of glass inside a fiber-optic cable.

58. Explain RAID
A method for providing fault tolerance by using multiple hard disk drives.

59. Explain NETBIOS and NETBEUI
NETBIOS is a programming interface that allows I/O requests to be sent to and received from a remote computer and it hides the networking hardware from applications. NETBEUI is NetBIOS extended user interface. A transport protocol designed by microsoft and IBM for the use on small subnets.

60. Explain redirector
Redirector is software that intercepts file or prints I/O requests and translates them into network requests. This comes under presentation layer.

61. Explain Beaconing
The process that allows a network to self-repair networks problems. The stations on the network notify the other stations on the ring when they are not receiving the transmissions. Beaconing is used in Token ring and FDDI networks.

62. Explain terminal emulation, in which layer it comes
Telnet is also called as terminal emulation. It belongs to application layer.

63. Explain frame relay, in which layer it comes
Frame relay is a packet switching technology. It will operate in the data link layer.

64. What do you meant by "triple X" in Networks
The function of PAD (Packet Assembler Disassembler) is described in a document known as X.3. The standard protocol has been defined between the terminal and the PAD, called X.28; another standard protocol exists between hte PAD and the network, called X.29. Together, these three recommendations are often called "triple X"

65. Explain SAP
Series of interface points that allow other computers to communicate with the other layers of network protocol stack.

66. Explain subnet
A generic term for section of a large networks usually separated by a bridge or router.

67. Explain Brouter
Hybrid devices that combine the features of both bridges and routers.

68. How Gateway is different from Routers
A gateway operates at the upper levels of the OSI model and translates information between two completely different network architectures or data formats.

69. What are the different type of networking / internetworking devices
Repeater: Also called a regenerator, it is an electronic device that operates only at physical layer. It receives the signal in the network before it becomes weak, regenerates the original bit pattern and puts the refreshed copy back in to the link.
Bridges: These operate both in the physical and data link layers of LANs of same type. They divide a larger network in to smaller segments. They contain logic that allow them to keep the traffic for each segment separate and thus are repeaters that relay a frame only the side of the segment containing the intended recipent and control congestion.
Routers: They relay packets among multiple interconnected networks (i.e. LANs of different type). They operate in the physical, data link and network layers. They contain software that enable them to determine which of the several possible paths is the best for a particular transmission.
Gateways:
They relay packets among networks that have different protocols (e.g. between a LAN and a WAN). They accept a packet formatted for one protocol and convert it to a packet formatted for another protocol before forwarding it. They operate in all seven layers of the OSI model.

70. Explain mesh network
A network in which there are multiple network links between computers to provide multiple paths for data to travel.

71. Explain passive topology
When the computers on the network simply listen and receive the signal, they are referred to as passive because they don’t amplify the signal in any way. Example for passive topology - linear bus.

72. What are the important topologies for networks
BUS topology:
In this each computer is directly connected to primary network cable in a single line.
Advantages:
Inexpensive, easy to install, simple to understand, easy to extend.
STAR topology:
In this all computers are connected using a central hub.
Advantages:
Can be inexpensive, easy to install and reconfigure and easy to trouble shoot physical problems.
RING topology:
In this all computers are connected in loop.
Advantages:
All computers have equal access to network media, installation can be simple, and signal does not degrade as much as
in other topologies because each computer
regenerates it.

73. What are major types of networks and explain
Server-based network
Peer-to-peer network
Peer-to-peer network, computers can act as both servers sharing resources and as clients using the resources.
Server-based networks provide centralized control of network resources and rely on server computers to provide security and network administration

74. Explain Protocol Data Unit
The data unit in the LLC level is called the protocol data unit (PDU). The PDU contains of four fields a destination service access point (DSAP), a source service access point (SSAP), a control field and an information field. DSAP, SSAP are addresses used by the LLC to identify the protocol stacks on the receiving and sending machines that are generating and using the data. The control field specifies whether the PDU frame is a information frame (I - frame) or a supervisory frame (S - frame) or a
unnumbered frame (U - frame).

75. Explain difference between baseband and broadband transmission
In a baseband transmission, the entire bandwidth of the cable is consumed by a single signal. In broadband transmission, signals are sent on multiple frequencies, allowing multiple signals to be sent simultaneously.

76. What are the possible ways of data exchange
(i) Simplex (ii) Half-duplex (iii) Full-duplex.

77. What are the types of Transmission media
Signals are usually transmitted over some transmission media that are broadly classified in to two categories.
Guided Media:
These are those that provide a conduit from one device to another that include twisted-pair, coaxial cable and fiber-optic cable. A signal traveling along any of these media is directed and is contained by the physical limits of the medium. Twisted-pair and coaxial cable use metallic that accept
and transport signals in the form of electrical current. Optical fiber is a glass or plastic cable that accepts and transports signals in the form of light.
Unguided Media:
This is the wireless media that transport electromagnetic waves without using a physical conductor. Signals are broadcast either through air. This is done through radio communication, satellite communication and cellular telephony.

78. Explain point-to-point protocol
A communications protocol used to connect computers to remote networking services including Internet service providers.

79. What are the two types of transmission technology available
(i) Broadcast and (ii) point-to-point

80. Difference between the communication and transmission.
Transmission is a physical movement of information and concern issues like bit polarity, synchronization, clock etc. Communication means the meaning full exchange of information between two communication media.

Finance Interview Questions

§ What do you know about our company? (CEO, Stock Price / Ticker Symbol, Recent Deals, Strategy–International/Equity Powers/Client Base, Strengths/Weaknesses, Competition?

§ Why do you want to work in this industry?

§ Why do you want to work for our company?

§ Why did you decide to go to b-school? Why a good time in your career?

§ Why did you choose Kenan-Flagler? What other schools did you consider and why?

§ What led you to choose your field or major study?

§ What jobs have you enjoyed the most? The least? Why?

§ What qualifications do you have that make you feel that you will be successful in your field?

§ What have you done which shows initiative and willingness to work?

§ Demonstrate a time you’ve showed initiative?

§ Do you have an analytical mind? Show me.

§ How do you spend your spare time? What are your hobbies? Why do you enjoy them?

§ What are your long range and short range goals? Why?

§ Where do see yourself five years from now? Ten years from now?

§ What are your priorities in life? Money, career, family, friendship, etc?

§ How do you define success?

§ How do you plan to achieve your career goals?

§ What do you consider to be your greatest strengths and weaknesses?

§ How would your peers describe you? Subordinates? Bosses? Friends?

§ How would you describe yourself?

§ Why should I hire you?

§ What qualifications do you have that make you think that you will be successful in this business?

§ Why should I hire you?

§ What skills/qualities separate you from the other candidates we’re talking to?

§ Name an accomplishment you’re most proud of? Why?

§ What’s the most important decision you’ve made, other than deciding coming to b-school?

§ Tell me about a failure in your life? What did you learn?

§ What subject at b-school do you like best? Least? Why?

§ Do you think that your grades are an indication of your academic achievement? Undergrad / at KFBS?

§ Tell me about a time when you were under a lot of pressure and how did you handle it?

§ What criteria are you using to evaluate the company for which you hope to work?

§ Who else are you talking to?

§ What’s the most creative thing you’ve ever done?

§ Tell me about a time when you were innovative?

§ What are you expecting out of a summer internship?

§ What is my name?

§ What do you expect to be doing on a day-to-day basis in this job?

§ Tell me a joke?

§ I like you – why do you think that is?

§ What do you want to know about our firm?

COMMON INDUSTRY-SPECIFIC INTERVIEW QUESTIONS

INVESTMENT BANKING

§ Why do you want to work/live in NYC?

§ What excites you most about investment banking? Why do you want to work in this business?

§ In what area of the bank are you most interested? Product/Industry?

§ Why did you choose Kenan-Flagler if you wanted to be on Wall Street?

§ Discuss three distinct methods commonly used to value a company?

§ It’s 10pm and you have a pitch to prepare for morning – what would you do to prepare a valuation for the client company?

§ I see you worked for Company X. What valuation methods would you use to value Company X and why? Which companies would you use as comparables and why? What multiples would you use to compare and why?

§ Reconcile Free Cash Flow from Net Income.

§ Can you walk me through how you would determine a company’s Weighted Average Cost of Capital (WACC)?

§ If a target company has a higher P/E than the acquirer in an all-stock deal, will the acquisition be accretive or dilutive?

§ If the Fed raises interest rates, what happens typically to bond prices? Bond Yields? Stock market? Why?

§ What are the benefits of pooling versus purchase method in an acquisition?

SALES & TRADING

§ Why do you want to work/live in NYC?

§ What excites you most about sales & trading? Why do you want to work in this business?

§ Why did you choose Kenan-Flagler if you wanted to be on Wall Street?

§ What are the roles of a sales/trader? How do they create value?

§ What qualities should a successful sales/trader possess?

§ What do you think caused the Asian crisis? Do you think the affected countries are now on the right track for recovery?

§ What are your overall thoughts on the Economy- Why? What does that mean for the stock/bond markets?

§ What is the current trading multiple of the S&P and do you see that expanding or contracting?

§ What about the shape of the yield curve? (obviously a more fixed income oriented question)

§ If you had $1MM, what asset classes would you look to invest in and why?

§ Lots of logic questions- for example, two trains are 100 miles apart and traveling toward each other at 40MPH and 60MPH respectively, when will they collide?

INDUSTRY FINANCE

· Why do you want to work in the finance area?

· Why do you want to work in this industry? This company?

· What do you think should be our largest expense item on our income statement / biggest asset or liability on our balance sheet?

· What is the difference between NPV and IRR and why would you use one over the other?

· Could you briefly describe how you would prepare a cash flow statement if you are given an income statement and a balance sheet.

· Could you briefly describe how you would evaluate a new machine/ plant/ aircraft that we are considering acquiring?

· What do you hope to accomplish over the summer, or what kind of a project would you like over the summer?

· What do you think is the role of finance in an organization or in our company?

· If profits / revenues have declined in the most recent quarter over the previous quarter and the corresponding quarter a year ago, how would explain or analyze the variance?

INTERVIEW GUIDANCE

DON’T FORGET THE BIG PICTURE…

Before you get bogged down in the minutiae of answering specific questions, think about the following broad, general issues:

§ Why do want to work in the financial services industry?

§ Why do you want to work in a particular area of a financial services firm (i.e., Investment Bank, Sales & Trading, Private Client Services)?

§ Why do you want to work for the firms that you’re interviewing?

If you give these issues serious thought and arrive at real answers then the answers to detailed questions will come more easily. If you decide that financial services is not the industry for you then you have saved yourself a lot of time, money and disappointment.

UNDERSTAND THE OBJECTIVE OF THE INTERVIEW

Make sure you know what you want to accomplish from the interview – Treat the interview as a 30 minute sales pitch. Don’t approach it as coming to the right answers – anticipate why the question is being asked. Be clear and concise in your response and focus your answer on communicating the points you want to sell.

SILENCE

When you’ve finished a response to a question, though it may seem difficult, simply smile and remain silent yourself. Answer a question to the best of your ability and then relax. Interviewers often use this silence to see if you can handle stress and still maintain poise.

GUIDANCE ON ASKING INTERVIEW QUESTIONS

Questions you have for the interviewer are your main vehicle for showing your enthusiasm. Before your interview, outline the things you hope to learn about the organization and your role within it. Be sure you will not come up blank when asked (as you doubt will be) "Do you have any questions?" Salary and benefit questions, however, should not be discussed until you have an offer.

Have questions for the interviewer. However, don't ask questions that could be answered by company literature or through basic research. Ask questions to gain information that you are sincerely seeking. By being an active listener during the interview, you may come up with questions you hadn't thought about prior to the interview: questions about the work environment; what motivates the interviewer in working for company X; what the track records of previous hires have been, etc., etc.

INTERVIEWING TIPS

"In the fields of observation, chance favors only the mind that is prepared." Although this quote, which is attributed to Louis Pasteur, relates to study in the sciences, it aptly describes the successful interviewee. Chance plays only a small role in the success of an interviewee who is well prepared.

1. Be prepared for all interviews. Know about the company and yourself.

2. Remember basic courtesy. Be on time or appropriately early for any appointment, refrain from bad habits and be courteous to the interviewer, even if he is not.

3. Show enthusiasm and energy. This is CRITICAL to a successful interview!

4. Remain poised and confident. If every other rule slips your mind, be sure to remember this one.

5. Be honest. Do not try to second-guess interviewers and tell them what you think they may want to hear.

6. Answer the Questions. The key to answering the questions asked is listening to them. Be positive with all answers.

7. Have examples for the skills you claim.

8. Don't forget your sense of humor – smile and have fun.

9. End the interview naturally

Investment Management Interview Questions

Investment Management interviews, like most other industries, will most likely involve a “get to know you” portion.Some typical examples are given below:
1. Tell me about yourself.
2. Why do you want investment management?
3. What qualities make for a good analyst?
4. What skills can you offer as an analyst? Any industry-specific ones?
5. What industry do you want to cover? Any preference for value or growth?
6. How would you analyze the industry?
7. Pitch a stock to me.
- This is the “Pitch Me a Stock” portion of the IM interview. BEFORE walking into an IM interview you should:
a) Choose at least 2 stocks to buy & 2 stocks to short
b) KNOW these companies
a. Major ratios
b. Comparable companies
c. The competitive landscape of the industry in which these stocks reside (basically a Porter’s 5 Forces exercise)
d. Build your own model, including income statement, balance sheet & cashflow statement. This will FORCE you to get to really know the company, its drivers, major assumptions and greatest risks.
e. Know the opinion of the stock on the Street and how your opinion either agrees or dissents with the consensus.
f. The effect of macroeconomic factors on the stock & its industry.
g. Major news events in the sector.
TIP: If you pick a well-known, widely covered stock it will certainly be one on which the interviewer has some sort of opinion even if he/her does not cover the stock. While this will certainly allow for a fluid discussion, it will ensure that you have to be CONFIDENT in your knowledge of the stock. Picking an obscure stock is a way for you to show your explanatory powers and lessen the chances that the interviewer knows everything there is to know about that stock. However, this might also work against you as the interviewer might lose interest in the story.
REMEMBER: They are attempting to assess:
(1) How much you prepared for the interview.
(2) If you can think quickly on your feet.
(3) If you can communicate well and take criticism.
8. How did you arrive at your target price?
9. What is your investment philosophy?
10. Do you own/have you owned any stocks? Tell me about them. Why did you buy/sell them?
11. Did you pitch a stock to the IMC fund members? What was the outcome?
12. Why do you want to work for us?
13. Why do you want to live in the (firm’s location) area? What ties to you have to the area?
14. What other firms are you looking at?
15. Where do you think the market is going? Why?
16. What do you think is most important: A company’s management, product, strategy, etc. ?
17. What are five questions you would ask a company’s management?
18. Which would you rather have: A good company with poor management, or a poor company with good management? Why?
19. What is more important: value or growth?
20. What are your long term goals?
21. What are you looking for in an internship/job?
22. What classes have you taken? What have been your favorites? Least favorite? Why?
23. What are your strengths? Weaknesses?
24. What accomplishments are you most proud of in your career to date?
25. Can you give me an example of a situation of facing conflict with a colleague or team member and how you dealt with it?
26. Can you give me an example of when you have had to use persuasion?
27. Is there anything you feel we didn’t cover?
28. What do you want me to know about when I walk away from this interview that might not be evident from your resume?
29. Can you give me an example of an ethical dilemma you’ve faced and how you managed the situation?
30. Tell me about some of the teams that you’ve (un)successfully worked on in the past.
31. Tell me about a failure you had.
32. Describe a situation when you made an impact at work.
33. What schools did you apply to? Which ones did you get into?.
34. What was your undergraduate GPA? GMAT?
35. Why did you go to your undergraduate school? Why did you choose your major?
36. There are several qualified people who are applying for this job. Why should we pick you?
37. Tell me about a time when you had to take a stand, and were met with opposition to your view. What was the outcome?
38. Why don’t you want to work in Investment Banking? VC? Private Equity? Consulting?
39. What can I tell you about my firm?
40. It is common practice to evaluate P/E ratio to determine if a stock is cheap. If you had no comparable companies for a stock, how can you evaluate if a stock is cheap?
41. How would you justify the price that XYZ paid for ABC? Do you expect XYZ to be a good investment in light of these acquisitions?
42. What makes a stock a good investment?
43. Do you invest in stocks or companies?
No universal agreement. Many successful investors say that you are an owner in the business. Many others believe you buy stocks…not companies. Momentum shops will definitely tell you that you buy stock. Growth and value analysts and firms may say either. Firms with a short term focus will probably say you buy stock, while firms with a longer term focus will likely say you buy companies.
44. If you had to put ALL of your money in one stock and leave it there for 10 years, which stock would it be and why?
45. Why do you want to work on the buy-side? Why not the sell-side?
46. Why are high P/E stocks more susceptible to major declines when interest rates increase?
High P/E stocks are high growth rate stocks. High growth rates usually mean that there are large cash inflows in the future, which now have to be discounted at a higher rate.
47. We want people who have a passion for investing in stocks – what have you done to demonstrate you have this?
48. What was your best investment? Why – what did you learn?
49. What was your worst investment? What did you learn?
50. If the fed hikes rates by 0.5%, what would you expect the impact to be on the market?
51. Difference between cyclical and growth industries, and how they are affected by external factors.
52. Where do you see the market in 5-10 years and what leads you to believe so?
53. What is P/E and how would you use it to compare companies?
54. Where is the NASDAQ, and what has it done over the last year?
55. Where is the Dow, and what has it done over the last year?
56. Where is the S&P 500, and what has it done over the last year?
57. Where is the Russell 2000, and what has it done over the last year?
58. Where is the dollar vs. the yen?
59. Where is the dollar vs. the euro?
60. What is the overnight rate?
61. What is the 10 year T-Note rate?
62. What is the price of gold?
63. Common practice to evaluate P/E ratio to determine if a stock is cheap. If you had no comparable companies for a stock, how can you evaluate if a stock is cheap?
The inverse of the P/E is the earnings yield of the company. You can compare the earnings yield to fixed income yields and/or dividend yields to get a feel for how cheap the stock is. So a P/E of 50 can be interpreted as an earnings yield of 2%, while 8 can be interpreted as 12.5% earnings yield.
64. How would you justify the price that XYZ paid for ABC? Do you expect XYZ to be a good investment in light of these acquisitions?
This is essentially a valuation question.
65. What makes a stock a good investment?
Make sure you know what the firms investment strategy is before answering this question. It's not a good idea to tell about value techniques to a firm that is growth or momentum oriented. With that said, both growth and value stocks are better investments when they have a sustainable competitive advantage. I recommend a discussion of basic M&S D30 concepts.
66. Why do you want to work on the buyside? Why not the sell-side?
67. I have the balance sheets from Intel and Disney/ABC in front of me. What do you think would be some of the differences?
68. What does the cost structure like for the [INSERT ANY INDUSTRY] industry? Fixed, variable etc? What are their biggest cost components?
69. What do you think the income statement would look like for a drug company like Pfizer? What would their COGS be? How about their operating margin?
70. What was you best investment? Why - what did you learn?
71. What was your worst investment? What did you learn?
72. For those of you that are career changers: Looking at your resume I can see that you have no market experience, what should make me believe that this is something you are seriously interested?
Here they are simply looking for interest level in the markets. It is obvious if you are a career changer that you are not going to be an expert right away, but you need to show some level of interest in finance, the markets, and their firm.
73. Where do you see the market in 5 - 10 years and what leads you to believe so?
There is no right or wrong answer to this question. Again, they are trying to judge you interest in the markets by your knowledge of what's been going on in the market and economy. This is a good opportunity to show that you have been keeping up to date with you WSJ.