Investment Banking interview preparation
Every question below is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers are written the way you would actually say them out loud — answer first, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 100
- Firms
- 46
- Updated
- September 2026
014Walk me through what OpenAI's income statement probably looks like.LazardInvestment Banking · San Francisco · 2026
Say this
Large and fast-growing revenue from subscriptions and API usage, a gross margin far below normal software because inference costs real compute, then enormous R&D and compute spend that puts operating income deeply negative.
Then walk it
- Revenue splits into consumer subscriptions, enterprise seats, and API consumption. The API line is usage-based, so it behaves more like a utility than like seat-based SaaS.
- Cost of revenue is the interesting part: every query costs GPU time. That is why gross margin sits well below the 75 to 85 percent you would expect from software.
- Below that, R&D dominates, and most of it is training compute plus a small number of very expensive people.
- Sales and marketing is unusually light for the growth rate, because distribution has been largely organic.
- So the shape is high growth, compressed gross margin, and a big operating loss funded by capital rather than cash flow. If I were valuing it I would care most about whether inference cost per query is falling faster than usage is rising.
Where candidates lose it
Treating it as generic SaaS with 80% gross margins. The entire point of the question is whether you understand that inference is a variable cost of goods sold. Name that and you have answered it, even if every number you guess is wrong.
Expect next
- How would you value it then?
- What would you need to believe for this to be worth its last round?
- Compare the business model to Microsoft's.
Reported by candidates at Lazard (Investment Banking, San Francisco, 2026). Source: Wall Street Oasis.
039Would an increase in price or an increase in volume be more preferable when you are trying to deliver synergies?LazardMergers and Acquisitions · New York · 2026
Say this
Price, almost always. A price increase drops straight to the bottom line with no incremental cost, while a volume increase carries variable cost, working capital and often capacity investment with it.
Then walk it
- A dollar of price is a dollar of gross profit. A dollar of volume is a dollar times the gross margin, so at a 40 percent margin you need two and a half times the revenue to get the same profit.
- Volume also consumes cash. More units means more inventory and receivables, and eventually more capacity, so free cash flow lags the revenue.
- Price is also faster. You can reprice a portfolio in a quarter; winning share takes years.
- The counterargument, and I would raise it: price synergies are much harder to defend to regulators, because raising prices post-merger is precisely what antitrust authorities are watching for. Volume and cost synergies are safer ground in a filing.
- Price is also fragile. It invites competitive response and it can accelerate customer churn, so the durability is lower even though the immediate flow-through is better.
Where candidates lose it
Answering only with the margin arithmetic. The regulatory dimension is what makes this an M&A question rather than a maths question, and at a firm like Lazard that is the half they are listening for.
Expect next
- How would you defend price synergies to a regulator?
- Which synergies do you actually put in the model?
- Why do most deals miss their synergy targets?
Reported by candidates at Lazard (Mergers and Acquisitions, New York, 2026). Source: Wall Street Oasis.
059Why would a sponsor prefer to take on high yield debt to finance an LBO rather than bank debt?LazardGeneralist · Amsterdam · 2025
Say this
Flexibility. High yield bonds are typically fixed rate, bullet maturity, with no maintenance covenants and no mandatory amortisation. You pay more in coupon to buy freedom and certainty of cash flow.
Then walk it
- No amortisation. Bank term loans grind down cash with mandatory repayments and a cash sweep; bonds are bullet, so all the cash stays in the business for growth or bolt-ons.
- Covenant-light. Bonds carry incurrence covenants that only bite when you do something, rather than maintenance covenants tested every quarter. A sponsor running a turnaround does not want a quarterly leverage test.
- Fixed rate. Bonds lock the coupon, so a rising rate environment does not eat the equity. Floating-rate term loans expose the deal to rate risk unless hedged.
- Longer tenor, usually seven to ten years against five to seven for a term loan, so no refinancing wall mid-hold.
- The costs, which you should name: a higher coupon, call protection that makes early repayment expensive, and a public disclosure burden. So the real answer is that sponsors use both, bank debt for the cheap senior layer and bonds for the flexible layer, and the mix depends on whether the thesis needs cash flexibility or the lowest possible cost.
Where candidates lose it
Answering 'because banks will not lend that much'. Sometimes true, but it misses the point. The trade is cost against flexibility, and naming covenant structure and bullet maturity is what shows leveraged finance literacy.
Expect next
- What is the difference between incurrence and maintenance covenants?
- Describe the differences between private credit and bank syndicated debt.
- What is call protection?
Reported by candidates at Lazard (Generalist, Amsterdam, 2025). Source: Wall Street Oasis.
075What are you seeing in your coverage sector right now, and where is the opportunity over the next 12 to 24 months?LazardMergers and Acquisitions · New York · 2026NomuraGeneralist · San Francisco · 2026
Say this
Answer like a banker pitching, not a student summarising. Name the structural change in the sector, then the deal type it generates, then the specific companies you would call.
Then walk it
- Open with the structural driver. Something like: the sector has too many subscale players and a cost base that only works above a certain revenue level, so consolidation is inevitable.
- Then name the deal type that follows. Structural overcapacity means mergers of equals and take-privates. A regulatory change means carve-outs. A technology shift means acquisitions of capability.
- Then be specific about targets and buyers. Two or three names with a reason each. This is the part almost nobody does, and it is the part that gets you the offer.
- Then the constraint. What is stopping these deals from happening today, financing cost, a valuation gap, antitrust, a founder who will not sell? Naming the blocker shows you are thinking commercially.
- Close with the actual pitch: 'so over the next year I would expect the mid-cap names to be taken out, and the call I would make is to X.'
Where candidates lose it
Giving a sector summary with no deal thesis. Coverage bankers get paid to originate. If your answer does not end with a transaction and a name, you have answered a different question.
Expect next
- Who would buy them?
- What is stopping that deal today?
- Pitch me a company.
Reported by candidates at Lazard (Mergers and Acquisitions, New York, 2026); Nomura (Generalist, San Francisco, 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.