Equity Research interview preparation

Questions

100

Traced to a firm

72

Firms

45

Updated

September 2026

Asked at

All firmsMorningstar12Man Group6Balyasny Asset Management5BLBlackRock5FTFranklin Templeton5MSCI5Jefferies4CSCredit Suisse3Fidelity Investments3Moody's3Perella Weinberg Partners3Point723S&P Global3The Vanguard Group3WMWellington Management3Advent International2Apollo Global Management2Bank of America2Carlyle Group2DED.E. Shaw2Houlihan Lokey2HSBC2Piper Sandler2Sequoia Capital2SSState Street2Viking Global Investors2WBWilliam Blair2ACAQR Capital Management1BGBaupost Group1BMBNY Mellon1Centerview Partners1Coatue Management1Goldman Sachs1GSGuggenheim Securities1HWHarris Williams1Insight Partners1Invesco1Mizuho1Moelis & Company1MSMorgan Stanley1PIMCO1SCSchroders1Scotiabank1T. Rowe Price1TSTruist Securities1

Topic

All topicsResearch process9Stock pitch6Company analysis8Investment philosophy5Valuation14Modelling2Portfolio and risk8Macro8Sector knowledge2Accounting8Career and fit12Industry knowledge6Quantitative research1Sector: technology3Sector: consumer1Sector: healthcare1Sector: energy1Sector: financials2Sector: industrials1Case and estimation2

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseFitBrainteaserMarket view

1. 031How do you decide when to sell?Portfolio and riskHardsuperdayAsset managementHedge funds

   Say this

   Three reasons and only three: the thesis played out and the price reflects it, the thesis is broken, or something better came along. Never sell because the price fell, and never hold because you are down.

   Then walk it

   1. Thesis achieved: the variant view became consensus and the upside to your revised target is no longer compelling. This is the happy case and people systematically sell too early here.
   2. Thesis broken: the specific thing you said would happen did not, or a fact you relied on turned out false. This should trigger a sale regardless of price, and it is where writing down the falsifier in advance pays for itself.
   3. Better use of capital: opportunity cost. In a concentrated portfolio every new idea must displace something, which imposes useful discipline.
   4. What is not a reason: the price fell, so it is cheaper now. That is only a reason to buy more if the thesis is intact, and only if you have checked rather than assumed.
   5. The behavioural safeguards: a written thesis with falsifiers, a scheduled review after every result, and a rule that you re-underwrite a position from scratch rather than defending your existing note.
   6. And separate trimming from selling. Reducing on valuation while the thesis compounds is a different decision from exiting, and conflating them is how people sell their best ideas.

   Where candidates lose it

   Giving a price-based rule like a fixed stop loss as the whole answer. For fundamental investing, the sell decision is thesis-based. Stops are a risk management overlay, not a research judgement, and saying only that reveals a trader's frame in a research seat.

   Expect next

   • How do you avoid selling winners too early?
   • Do you use stop losses?
   • How do you re-underwrite a position?
2. 032How do you size a position?Portfolio and riskHardsuperdayHedge fundsAsset management

   Say this

   By conviction and by downside, not by expected upside. The question is how much you lose if you are wrong, multiplied by how likely that is, against the portfolio's tolerance for that loss.

   Then walk it

   1. Start from the downside. If the bear case is minus 40 percent and you would be uncomfortable losing more than 2 percent of the fund on one name, the position is capped at about 5 percent.
   2. Then conviction, which really means how confident you are in the analysis and how falsifiable it is. A thesis with a clear near-term test supports a larger position than one that depends on a five-year structural view.
   3. Then correlation. Three positions expressing the same macro view are one position. Sizing has to be done at the portfolio level or you accumulate hidden concentration.
   4. Then liquidity: how many days of average volume is the position, and can you exit it in a stressed market? Illiquidity is a real constraint on size regardless of conviction.
   5. The Kelly criterion is the theoretical frame, but full Kelly is far too aggressive in practice because you cannot estimate probabilities that precisely. Most investors run a fraction of it, and saying that shows you know the theory and its limits.
   6. In a multi-manager seat, most of this is imposed by the risk system anyway, and the analyst's job is to argue for the sizing within those limits.

   Where candidates lose it

   Sizing by upside. Everyone's best idea has the most upside, and sizing on that alone is how funds blow up. Downside and correlation are the content of a real answer.

   Expect next

   • What is your maximum position size?
   • How do you handle correlated positions?
   • Would you add to a loser?
3. 033Tell me about something going on in the world that has interested you.MacroCorefirst roundBLBlackRockInvestment Research · New York · 2026BLBlackRockGeneralist · London · 2026HSBCEquity Research · New York · 2026

   Say this

   Pick something with an investable consequence, explain the mechanism in two sentences, then say what it means for an asset price. The test is whether you think in cause and effect or in headlines.

   Then walk it

   1. Choose something you can trace to a market. Trade policy, an energy transition bottleneck, a demographic shift, a regulatory change, a technology capital expenditure cycle.
   2. State the fact precisely and with a number. Precision is the whole credibility signal here.
   3. Then the mechanism: who gains, who loses, and through what channel. 'Tariffs on component imports raise input costs for domestic assemblers, who cannot fully pass them through, so margins compress' is a chain of reasoning.
   4. Then the market conclusion: which asset, which direction, and whether you think it is already priced.
   5. Then the uncertainty: what would make you wrong. Interviewers at asset managers are wary of people with strong opinions and no error bars.
   6. Keep politics out of it. Analyse the policy's effect, do not evaluate the politics.

   Where candidates lose it

   Recounting a news story with no transmission mechanism and no asset implication. Also picking something so large and obvious that you cannot say anything differentiated about it.

   Expect next

   • So how would you position for it?
   • Is that priced in?
   • What would change your view?

   Reported by candidates at BlackRock (Investment Research, New York, 2026); BlackRock (Generalist, London, 2026); HSBC (Equity Research, New York, 2026). Source: Wall Street Oasis.

4. 034How do you keep up with markets and news?Career and fitCorephone / first roundBLBlackRockAsset Management · Tokyo · 2026Goldman SachsInvestment Banking · New York · 2025

   Say this

   Name specific sources and, more importantly, describe the routine. Then give one thing you have taken from them recently, because the follow-up is always 'so what have you read lately'.

   Then walk it

   1. Be specific rather than listing everything. Two or three daily sources and one or two deeper weekly ones is more credible than a list of ten.
   2. Include primary sources, which is what distinguishes a serious answer: company filings, transcripts, central bank statements. Anyone can read a newspaper; reading the 10-K is the job.
   3. Describe the routine and the time. 'Thirty minutes on the market wrap and transcripts before class, then a longer read at the weekend' is concrete.
   4. Mention how you retain it. A running note on the companies you follow, or a watchlist with your own estimates. That shows a process rather than consumption.
   5. Then be ready with the payoff: one specific thing you read this week and what you concluded from it. Have that loaded before you walk in, because the follow-up is guaranteed.

   Where candidates lose it

   Naming publications you do not actually read. The follow-up is immediate and specific, and being unable to discuss something you claimed to read this morning is worse than naming fewer sources.

   Expect next

   • What have you been reading recently?
   • What did you take from it?
   • What are you watching this week?

   Reported by candidates at BlackRock (Asset Management, Tokyo, 2026); Goldman Sachs (Investment Banking, New York, 2025). Source: Wall Street Oasis.

5. 035Tell me about a time someone questioned your integrity.Career and fitHardsuperdayBMBNY MellonEquity Research · New York · 2022

   Say this

   Choose a case where the challenge was reasonable given what the other person could see, and where you resolved it by showing your work. The point is how you respond to being doubted, not that you were vindicated.

   Then walk it

   1. Pick something real but bounded: a number in your analysis that someone thought was wrong, a result that looked too good, a process someone thought you had skipped.
   2. Explain why the doubt was reasonable from their position. Starting with 'they were being unfair' reads badly and misses the point of the question.
   3. Then the response: you showed the working, walked them through the source data, or invited them to check it. Transparency rather than argument.
   4. Then the outcome, and if you had made an error, say so. Admitting a mistake here is stronger than a clean vindication, because it shows how you behave when you are actually wrong.
   5. Then the lasting change: how you document or communicate differently now. In research, where your entire product is a claim, being auditable is the whole professional standard.

   Where candidates lose it

   Getting defensive in the retelling, or choosing an example so serious that it raises new questions. Regulated firms ask this to see whether you respond to scrutiny with openness or with resistance.

   Expect next

   • What if you had actually been wrong?
   • Tell me about an ethical dilemma you faced.
   • How do you make your work auditable?

   Reported by candidates at BNY Mellon (Equity Research, New York, 2022). Source: Wall Street Oasis.

6. 036How would you forecast revenue for a company you have never modelled before?ModellingIntermediatetechnicalHoulihan LokeyInvestment Banking · New York · 2026

   Say this

   Build it from drivers, never from a growth rate. Find the two physical quantities that multiply to revenue, price and volume in some form, then forecast each separately against something observable.

   Then walk it

   1. Decompose first. A retailer is stores times sales per store. An airline is available seat miles times load factor times yield. A software business is customers times average revenue per customer. A bank is loan balances times net interest margin.
   2. Forecast each driver against something external: industry capacity, population, disposable income, an installed base, a contract backlog. That makes the forecast falsifiable and lets you update it when the external data moves.
   3. Cross-check top-down. If your bottom-up build implies the company takes six points of market share in two years, you need a reason. Reconciling bottom-up to market size is the sanity check that catches most bad models.
   4. Separate organic from acquired growth. A company growing 15 percent of which 10 is bought is a completely different business from one growing 15 organically, and blending them hides that.
   5. Then sanity-check against history: is the implied growth faster than the company has ever achieved? If so, say why this time is different, or lower it.
   6. A flat growth-rate assumption is acceptable only in the terminal years, and even then you should say what it implies.

   Where candidates lose it

   Applying a growth percentage to last year's revenue. It cannot be argued with, cannot be updated by new data, and gives you no basis for a variant view. Driver-based building is the entire point.

   Expect next

   • What is the driver for the company we cover?
   • How do you reconcile bottom-up to market size?
   • Where does your forecast differ from consensus?

   Reported by candidates at Houlihan Lokey (Investment Banking, New York, 2026). Source: Wall Street Oasis.

7. 037How would you model a subscription software business, and what metrics matter?Sector: technologyHardtechnicalInsight PartnersSoftware · New York · 2022Piper SandlerInvestment Banking · Burlingame · 2026

   Say this

   Model the recurring revenue base by cohort rather than the income statement. Opening ARR, plus new, plus expansion, less churn and downgrades, gives closing ARR. Everything else follows from that roll-forward.

   Then walk it

   1. The ARR bridge is the model. Once you have opening ARR, new bookings, expansion and churn, revenue is largely determined, because recognised revenue is a lagging function of the contracted base.
   2. Key metrics: net revenue retention, gross retention, gross margin, customer acquisition cost payback, and the rule of forty which is growth plus free cash flow margin.
   3. Net retention above 110 percent is the single most important number, because it means the installed base grows without selling anything new. That is what justifies a high revenue multiple.
   4. Watch the gap between billings, revenue and deferred revenue. Billings lead revenue, so a slowdown shows up in billings a quarter or two before it hits the reported line. That is often where the variant view lives.
   5. Cost side: gross margin tells you how much real compute or support sits in cost of revenue, sales and marketing efficiency tells you whether growth is bought or earned, and R&D as a share of revenue tells you about future product.
   6. And take stock-based compensation seriously, because in software it is large enough to determine whether the company is profitable at all.

   Where candidates lose it

   Modelling revenue directly and ignoring the ARR bridge and deferred revenue. Also quoting the rule of forty without knowing whether it uses free cash flow margin or operating margin, since the two give very different answers.

   Expect next

   • What is the rule of forty?
   • Why do billings lead revenue?
   • What net retention would justify a 10 times revenue multiple?

   Reported by candidates at Insight Partners (Software, New York, 2022); Piper Sandler (Investment Banking, Burlingame, 2026). Source: Wall Street Oasis.

8. 038What is the rule of forty, and what are its weaknesses?Sector: technologyIntermediatetechnicalTechnology coverageGrowth equity

   Say this

   Revenue growth plus profit margin should exceed 40. It says a software company can be forgiven for losing money if it is growing fast, or for growing slowly if it is profitable, but not both.

   Then walk it

   1. The logic is a trade-off: spending on growth suppresses margin, so the combined figure measures whether that spend is productive.
   2. The first weakness is the margin definition. Free cash flow margin, operating margin and EBITDA margin give very different scores for the same company, and firms naturally quote the flattering one.
   3. The second is that it treats a growth point and a margin point as equivalent. They are not: for a long-duration asset, a point of durable growth is worth far more than a point of margin, because it compounds.
   4. The third is that it ignores the quality of the growth. Growth bought through acquisitions, or through discounting that damages net retention, scores the same as organic growth from pricing.
   5. And it says nothing about durability. A company at 60 today that decelerates sharply next year is worth less than a steady 42.
   6. So I would use it as a screen to compare companies quickly, never as a valuation input. The valuation question is always durability, and the rule of forty is silent on it.

   Where candidates lose it

   Quoting the heuristic without a critique. Anyone can state it. Naming the margin-definition problem and the growth-versus-margin asymmetry is what shows you have used it rather than read it.

   Expect next

   • Which margin would you use?
   • Would you rather have 20 percent growth at 20 percent margin, or 40 percent growth at breakeven?
   • How do you assess durability of growth?
9. 039How would you analyse a retailer?Sector: consumerIntermediatetechnicalBank of AmericaConsumer and Retail · London · 2026

   Say this

   Same-store sales and gross margin drive everything. Decompose comps into traffic, basket size and price, then check whether margin is being bought with discounting, and watch inventory as the early warning.

   Then walk it

   1. Revenue splits into comparable store sales and square footage growth. Comps are the quality signal; new stores can mask a deteriorating base.
   2. Decompose comps further into transactions and average ticket, and ticket into units and price. A comp driven by price in an inflationary period is weaker than one driven by traffic.
   3. Gross margin is where the truth sits. Rising sales with falling gross margin means discounting, which is buying revenue rather than earning it.
   4. Inventory is the leading indicator. If inventory grows faster than sales for two quarters, markdowns are coming and the margin will follow. This is the single most reliable early signal in retail.
   5. Then the cost structure: occupancy and labour are largely fixed, so retail has high operating leverage. A two-point comp swing moves EBIT far more than it moves revenue.
   6. Then the structural questions: online mix and its margin, private label penetration, and whether the store estate is an asset or a liability. And check the lease liabilities, because a retailer's real leverage is usually in the leases.

   Where candidates lose it

   Focusing on revenue growth without decomposing comps, and ignoring inventory. Inventory-to-sales is the metric that separates people who have covered retail from people who have read about it.

   Expect next

   • What does rising inventory tell you?
   • How do you treat lease liabilities?
   • How would you value it against an online-only peer?

   Reported by candidates at Bank of America (Consumer and Retail, London, 2026). Source: Wall Street Oasis.

10. 040How would you analyse a pharmaceutical company?Sector: healthcareHardtechnicalMoelis & CompanyMergers and Acquisitions · Los Angeles · 2022GSGuggenheim SecuritiesHealthcare · London · 2026

    Say this

    Value it asset by asset. The marketed drugs are annuities running to patent expiry, the pipeline is a set of probability-weighted options, and the two are valued completely differently.

    Then walk it

    1. Marketed products: forecast each drug's sales to its loss of exclusivity date, then model the cliff. Generic entry typically removes 70 to 90 percent of small-molecule revenue within a year or two; biologics erode more slowly because biosimilars are harder.
    2. Pipeline: for each candidate, size the patient population, price, penetration and duration, then apply probability of success by phase. Roughly 60 to 70 percent from Phase III, around 30 percent from Phase II, low single digits preclinical.
    3. Sum the parts and add net cash. The output is a range, because a single readout can move the value by a factor.
    4. Then the structural questions: the patent cliff schedule over the next five years, R&D productivity measured as approvals per dollar spent, and whether the company can acquire its way out of a gap.
    5. Pricing and reimbursement risk is the sector's macro. Policy on drug pricing can reset the whole group's multiple independently of any company's execution.
    6. The practical framing for a note: what percentage of current revenue loses exclusivity within five years, and does the pipeline plus reasonable business development replace it? That one question drives most pharma investment cases.

    Where candidates lose it

    Applying a single P/E to the whole company. A pharma is a portfolio of expiring annuities plus options, and blending them into one multiple hides the cliff, which is the entire risk.

    Expect next

    • How do you handle the patent cliff?
    • What probability would you use for a Phase II asset?
    • Which is riskier, biologics or small molecules?

    Reported by candidates at Moelis & Company (Mergers and Acquisitions, Los Angeles, 2022); Guggenheim Securities (Healthcare, London, 2026). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.