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
020What is the beta of a slot machine?Rothschild & CoMergers and Acquisitions · New York · 2021Rothschild & CoGeneralist · New York · 2026
Say this
Zero. A slot machine's payout is random but the randomness is entirely idiosyncratic, and beta only measures the part of risk that moves with the market. Uncorrelated risk carries no beta.
Then walk it
- Beta is covariance with the market divided by the variance of the market. If the payout is independent of the market, the covariance is zero, so beta is zero.
- The machine is enormously risky in a standard deviation sense. That is exactly the point: total volatility and systematic risk are different things.
- This is CAPM's central claim. The market only pays you for risk you cannot diversify away, and pure gambling risk diversifies to nothing across many pulls.
- The sharp extension: a casino's equity beta is clearly not zero, because discretionary gambling spend rises and falls with the economy. The machine's payout is uncorrelated; the volume of people playing it is not.
- So the answer is zero for the mechanism, positive for the business built on it.
Where candidates lose it
Answering 'very high, because it is so risky'. That confuses volatility with systematic risk and tells the interviewer you do not really understand CAPM. Get to zero fast, then earn the extra credit with the casino distinction.
Expect next
- So why is a casino's beta not zero?
- How would you value your favourite animal?
- What is your personal beta?
Reported by candidates at Rothschild & Co (Mergers and Acquisitions, New York, 2021); Rothschild & Co (Generalist, New York, 2026). Source: Wall Street Oasis.
058What type of company is a good candidate for a dividend recapitalisation?Rothschild & CoInvestment Banking · London · 2026
Say this
One that has already deleveraged meaningfully, has very stable cash flow, and has no near-term need for its balance sheet. Typically a sponsor-owned asset two or three years into the hold where the exit has been delayed.
Then walk it
- The mechanical precondition is headroom. The company must have paid down enough debt that re-levering back to its original multiple is still something the credit market will fund.
- Cash flow has to be genuinely stable, because you are removing the cushion. Contracted revenue, low cyclicality, low CapEx.
- No competing call on capital. If the company needs to fund a plant or an acquisition, the cash should go there instead.
- The motivation is almost always sponsor-side: fund life is advancing, the exit window is shut, and the sponsor wants to de-risk and crystallise part of the return. It resets the IRR clock because cash returned early is heavily weighted.
- And the honest downside: nothing about the operating business improved. Leverage went back up, the equity cushion is thinner, and if the cycle turns the company is more fragile. Lenders price that, and the covenant package usually tightens.
Where candidates lose it
Describing the mechanics but not the motive. This question is really asking whether you understand sponsor incentives and fund life. And you should name the downside, because a banker who pitches a recap without acknowledging the fragility is not credible.
Expect next
- How does it affect the sponsor's IRR?
- Why would lenders agree to it?
- What happens if the cycle turns afterwards?
Reported by candidates at Rothschild & Co (Investment Banking, London, 2026). Source: Wall Street Oasis.
100Why should we take you over the other candidates from your university with exactly the same experience?Rothschild & CoInvestment Banking · Milan · 2025Houlihan LokeyInvestment Banking · New York · 2026MorningstarGeneralist · Chicago · 2024
Say this
Do not claim to be smarter or more driven, because everyone in the room says that. Name one specific, verifiable thing you have that they probably do not, and connect it to the work.
Then walk it
- The honest framing first: on paper we are similar, and I would not pretend otherwise. So the answer has to be something specific rather than an adjective.
- Then the differentiator, and it should be concrete. Depth in one sector nobody else in the class has looked at. A language and a market. A technical skill like Python or SQL you have actually used on a dataset. Having run something with real accountability and real money.
- Then tie it to their business, not to your CV. Something like: your industrials team does a lot of cross-border work in Italy, and I can read Italian filings and speak to a management team without an interpreter. That is useful on day one.
- Then the evidence, in one line, because the claim is worthless unless it is checkable.
- And avoid the two failure modes: listing adjectives, which is unfalsifiable and forgettable, or disparaging other candidates, which reads badly in a business where you will spend your life in a small team.
Where candidates lose it
Answering with 'work ethic' and 'passion'. Every candidate says both and neither can be verified. Pick a specific, checkable capability and connect it to something their desk actually does. Specificity is the entire answer.
Expect next
- What is something about you that is not on your CV?
- Why this group, and what do you add that someone else cannot?
- What is one thing you wish had gone differently today?
Reported by candidates at Rothschild & Co (Investment Banking, Milan, 2025); Houlihan Lokey (Investment Banking, New York, 2026); Morningstar (Generalist, Chicago, 2024). 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.