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
055If I make 8 times my money in 6 years, what is my IRR?Warburg PincusPrivate Equity · New York · 2012
Say this
About 41 percent. Eight times is two doublings and a bit: 2 times is 100 percent, 4 times is 300 percent, 8 times is 2 cubed, so the money doubles three times in six years, which is a doubling every two years. A doubling in two years is about 41 percent a year.
Then walk it
- Reframe 8 times as 2 to the power of 3. Three doublings in six years means one doubling every two years.
- The rule of 72 in reverse: 72 divided by 2 years is 36, so roughly 36 percent. That gets you close, and the precise answer is 41 percent because the rule of 72 is an approximation.
- Exact check: 1.41 squared is 2, so a 41 percent annual return doubles money in two years, and three of those gives 8 times.
- Worth memorising the grid, because these come up constantly: 2 times in 5 years is 15 percent, 2.5 times in 5 years is 20 percent, 3 times in 5 years is 25 percent, 2 times in 3 years is 26 percent.
- Then say the practical caveat: IRR is time-weighted, so an early dividend recap flatters it. Money multiple and IRR can disagree, and sponsors quote whichever looks better.
Where candidates lose it
Trying to compute the sixth root arithmetically and stalling. Decompose the multiple into powers of two and use doublings. Interviewers are testing mental agility and whether you know the standard IRR grid cold.
Expect next
- Which is better, 25 percent IRR over 5 years or 30 percent over 3?
- Why can IRR and money multiple disagree?
- How does a dividend recap affect IRR?
Reported by candidates at Warburg Pincus (Private Equity, New York, 2012). Source: Wall Street Oasis.
056Which yields a greater return, an IRR of 25 percent over 5 years or an IRR of 30 percent over 3 years?Centerview PartnersGeneralist · New York · 2026
Say this
The 25 percent over five years returns more total money: about 3.05 times against about 2.2 times. But the 30 percent is the better rate of return, so the answer depends on whether you can redeploy the capital.
Then walk it
- 1.25 to the fifth is roughly 3.05 times. 1.3 cubed is roughly 2.2 times. So more absolute money from the longer hold.
- But IRR is an annualised rate, and 30 percent beats 25 percent per year of capital employed.
- The deciding question is reinvestment. If you can put that capital straight into another 30 percent deal for the remaining two years, the short hold wins comfortably: 2.2 times 1.69 is about 3.7 times.
- If the capital sits in cash for two years, the long hold wins.
- This is exactly why limited partners care about both IRR and multiple on invested capital, and why a fund with spectacular IRR from fast flips can return less cash than one with lower IRR and longer holds.
Where candidates lose it
Answering with only one of the two framings. The question is deliberately ambiguous, and the right move is to compute both, then name reinvestment risk as the thing that decides it.
Expect next
- So which would a limited partner prefer?
- Why do funds report both IRR and MOIC?
- How would you game an IRR?
Reported by candidates at Centerview Partners (Generalist, New York, 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.