What does an investment bank actually do?

An investment bank advises companies on major transactions such as M&A and helps them raise capital by selling stock and bonds to investors. It earns fees for advice, underwriting, execution, and distribution — it is an intermediary, not an investor.

What's the difference between an investment bank and a commercial bank?

A commercial bank takes deposits and makes loans, earning the spread between the two rates and holding the credit risk. An investment bank advises on M&A and capital raising and underwrites securities, earning fees at the point of the transaction; universal banks do both.

What is a private equity firm? What is a hedge fund?

A private equity firm raises a fund from institutional investors and uses it, plus borrowed money, to buy entire companies, improve them over several years, and sell them for a profit — in deal contexts PE firms are called financial sponsors. A hedge fund pools investor money to trade securities in public markets, betting on prices going up or down.

What's the difference between sell-side and buy-side?

Sell-side firms, such as investment banks, sell advice, securities, and market access, earning fees on transactions. Buy-side firms, such as PE firms, hedge funds, and asset managers, invest capital and buy securities or companies, earning returns on what they own.

What does a junior banker actually do day-to-day?

Builds financial models, creates the presentations and marketing documents that go to clients and buyers, researches companies and markets, tracks diligence, coordinates workstreams, and turns senior banker comments on every deliverable.

What's the difference between coverage groups and product groups?

Coverage groups own industry/client relationships, such as Healthcare or TMT. Product groups specialize in transaction types, such as M&A, Leveraged Finance, ECM, DCM, and Restructuring; deals often use both.

A stock is a share of ownership in a company. Shareholders are the residual owners: creditors get paid first, and whatever value is left belongs to equity — which is why stockholders bear the most risk and capture the upside.

What is market cap, and how is it different from the share price?

Market cap is share price times shares outstanding — the total market value of a company's equity. Share price by itself tells you nothing about size, because companies slice their equity into very different numbers of shares.

A bond is debt broken into tradable pieces: the issuer borrows money and promises fixed interest payments — coupons — plus repayment of the principal at maturity. Bondholders are creditors and sit ahead of equity holders.

What happens to bond prices as interest rates rise, and can you explain why?

Bond prices fall when interest rates rise. A bond's cash flows are fixed by contract, so when new bonds offer higher rates, an old bond can only compete by trading at a discount — the price drops until a buyer's return matches the market.

What's a public company vs. a private company?

A public company has shares listed on an exchange, an observable market price, and mandatory public reporting. A private company's shares are held by a small group, don't trade, and come with far lighter disclosure — value has to be negotiated rather than looked up.

Why would a company issue debt or equity? What are the pros and cons of each?

Debt is cheaper — interest is tax-deductible and lenders bear less risk because they're paid first — and it avoids dilution, but it adds mandatory payments and bankruptcy risk. Equity costs more and dilutes the owners, but requires no repayment and gives maximum flexibility.

What does an investment bank actually do?

An investment bank advises companies on major transactions such as M&A and helps them raise capital by selling stock and bonds to investors. It earns fees for advice, underwriting, execution, and distribution — it is an intermediary, not an investor.

What's the difference between an investment bank and a commercial bank?

A commercial bank takes deposits and makes loans, earning the spread between the two rates and holding the credit risk. An investment bank advises on M&A and capital raising and underwrites securities, earning fees at the point of the transaction; universal banks do both.

What is a private equity firm? What is a hedge fund?

A private equity firm raises a fund from institutional investors and uses it, plus borrowed money, to buy entire companies, improve them over several years, and sell them for a profit — in deal contexts PE firms are called financial sponsors. A hedge fund pools investor money to trade securities in public markets, betting on prices going up or down.

What's the difference between sell-side and buy-side?

Sell-side firms, such as investment banks, sell advice, securities, and market access, earning fees on transactions. Buy-side firms, such as PE firms, hedge funds, and asset managers, invest capital and buy securities or companies, earning returns on what they own.

What does a junior banker actually do day-to-day?

Builds financial models, creates the presentations and marketing documents that go to clients and buyers, researches companies and markets, tracks diligence, coordinates workstreams, and turns senior banker comments on every deliverable.

What's the difference between coverage groups and product groups?

Coverage groups own industry/client relationships, such as Healthcare or TMT. Product groups specialize in transaction types, such as M&A, Leveraged Finance, ECM, DCM, and Restructuring; deals often use both.

A stock is a share of ownership in a company. Shareholders are the residual owners: creditors get paid first, and whatever value is left belongs to equity — which is why stockholders bear the most risk and capture the upside.

What is market cap, and how is it different from the share price?

Market cap is share price times shares outstanding — the total market value of a company's equity. Share price by itself tells you nothing about size, because companies slice their equity into very different numbers of shares.

A bond is debt broken into tradable pieces: the issuer borrows money and promises fixed interest payments — coupons — plus repayment of the principal at maturity. Bondholders are creditors and sit ahead of equity holders.

What happens to bond prices as interest rates rise, and can you explain why?

Bond prices fall when interest rates rise. A bond's cash flows are fixed by contract, so when new bonds offer higher rates, an old bond can only compete by trading at a discount — the price drops until a buyer's return matches the market.

What's a public company vs. a private company?

A public company has shares listed on an exchange, an observable market price, and mandatory public reporting. A private company's shares are held by a small group, don't trade, and come with far lighter disclosure — value has to be negotiated rather than looked up.

Why would a company issue debt or equity? What are the pros and cons of each?

Debt is cheaper — interest is tax-deductible and lenders bear less risk because they're paid first — and it avoids dilution, but it adds mandatory payments and bankruptcy risk. Equity costs more and dilutes the owners, but requires no repayment and gives maximum flexibility.

Beginner Investment Banking Interview Questions

Q: What are beginner investment banking interview questions?

Beginner IB interview questions focus on accounting fundamentals, valuation basics, and fit vocabulary. Examples include: what does an investment bank do, what is enterprise value, what are the three financial statements, and walk me through a DCF.

Q: How many beginner investment banking questions should I practice?

A serious beginner should practice at least 50 questions before live interviews. That is enough repetition to cover accounting, valuation, capital markets vocabulary, and common first follow-ups.

Q: Are beginner technical questions enough for first rounds?

They are necessary but usually not enough. First rounds can start with beginner material and then move into intermediate follow-ups on depreciation, working capital, WACC, enterprise value, and accretion/dilution.

Q: Should I memorize beginner IB answers?

Memorize the structure, not a script. You should know the key steps and direction of each answer, but interviewers can tell when a candidate is reciting without understanding.

Q: What should I study after beginner IB interview questions?

Move into intermediate accounting, DCF, WACC, enterprise value, working capital, valuation multiples, and basic accretion/dilution.

Q: How long should I prepare for investment banking interviews?

Most candidates spend 8 to 12 weeks of dedicated prep. The first 2 to 3 weeks should be on beginner technicals and fit. Weeks 4 to 8 cover intermediate technicals and behavioral depth. The final 2 to 4 weeks are advanced LBO, merger model, and Superday-style pressure follow-ups.

Q: What is the most common beginner investment banking interview question?

The walk-me-through-a-DCF question is the single most common beginner technical. Variants ask for an EBITDA bridge, walk through the three financial statements, or define enterprise value vs. equity value. These four prompts together cover the majority of first-round technical opens.

A practical article-style question list for candidates building the base layer of investment banking technical prep.

By Michael Neal11 min readGOBLIN100 Questions 1-1212 written answersLast updated May 6, 2026

Beginner investment banking interview questions test whether you can define the core terms, walk through the basic statements, and give clean 30-60 second answers before the interviewer asks a follow-up.

GOBLIN100 Questions 1-12

Use this beginner list to practice short, direct answers. A good beginner answer should take 30-60 seconds, define the term, and name one trap or follow-up. These are positions 1-12 of the ordered GOBLIN100 ramp.

GOBLIN100 #1OFFERGOBLIN
What does an investment bank actually do?
An investment bank advises companies on major transactions such as M&A and helps them raise capital by selling stock and bonds to investors. It earns fees for advice, underwriting, execution, and distribution — it is an intermediary, not an investor.
Work full answer in app
GOBLIN100 #2OFFERGOBLIN
What's the difference between an investment bank and a commercial bank?
A commercial bank takes deposits and makes loans, earning the spread between the two rates and holding the credit risk. An investment bank advises on M&A and capital raising and underwrites securities, earning fees at the point of the transaction; universal banks do both.
Work full answer in app
GOBLIN100 #3OFFERGOBLIN
What is a private equity firm? What is a hedge fund?
A private equity firm raises a fund from institutional investors and uses it, plus borrowed money, to buy entire companies, improve them over several years, and sell them for a profit — in deal contexts PE firms are called financial sponsors. A hedge fund pools investor money to trade securities in public markets, betting on prices going up or down.
Work full answer in app
GOBLIN100 #4OFFERGOBLIN
What's the difference between sell-side and buy-side?
Sell-side firms, such as investment banks, sell advice, securities, and market access, earning fees on transactions. Buy-side firms, such as PE firms, hedge funds, and asset managers, invest capital and buy securities or companies, earning returns on what they own.
Work full answer in app
GOBLIN100 #5OFFERGOBLIN
What does a junior banker actually do day-to-day?
Builds financial models, creates the presentations and marketing documents that go to clients and buyers, researches companies and markets, tracks diligence, coordinates workstreams, and turns senior banker comments on every deliverable.
Work full answer in app
GOBLIN100 #6OFFERGOBLIN
What's the difference between coverage groups and product groups?
Coverage groups own industry/client relationships, such as Healthcare or TMT. Product groups specialize in transaction types, such as M&A, Leveraged Finance, ECM, DCM, and Restructuring; deals often use both.
Work full answer in app
GOBLIN100 #7OFFERGOBLIN
What is a stock?
A stock is a share of ownership in a company. Shareholders are the residual owners: creditors get paid first, and whatever value is left belongs to equity — which is why stockholders bear the most risk and capture the upside.
Work full answer in app
GOBLIN100 #8OFFERGOBLIN
What is market cap, and how is it different from the share price?
Market cap is share price times shares outstanding — the total market value of a company's equity. Share price by itself tells you nothing about size, because companies slice their equity into very different numbers of shares.
Work full answer in app
GOBLIN100 #9OFFERGOBLIN
What is a bond?
A bond is debt broken into tradable pieces: the issuer borrows money and promises fixed interest payments — coupons — plus repayment of the principal at maturity. Bondholders are creditors and sit ahead of equity holders.
Work full answer in app
GOBLIN100 #10Goldman Sachs/ 1st Round/ Industrials
What happens to bond prices as interest rates rise, and can you explain why?
Bond prices fall when interest rates rise. A bond's cash flows are fixed by contract, so when new bonds offer higher rates, an old bond can only compete by trading at a discount — the price drops until a buyer's return matches the market.
Work full answer in app
GOBLIN100 #11OFFERGOBLIN
What's a public company vs. a private company?
A public company has shares listed on an exchange, an observable market price, and mandatory public reporting. A private company's shares are held by a small group, don't trade, and come with far lighter disclosure — value has to be negotiated rather than looked up.
Work full answer in app
GOBLIN100 #12OFFERGOBLIN
Why would a company issue debt or equity? What are the pros and cons of each?
Debt is cheaper — interest is tax-deductible and lenders bear less risk because they're paid first — and it avoids dilution, but it adds mandatory payments and bankruptcy risk. Equity costs more and dilutes the owners, but requires no repayment and gives maximum flexibility.
Work full answer in app

What this level tests

Investment banking role and junior banker workflow
Stocks, debt, enterprise value, and equity value
Three-statement basics
DCF and valuation vocabulary
Introductory M&A and LBO concepts

The trap at this level is not difficulty - it is clarity. Most candidates know the answer but cannot deliver it in 30 seconds without rambling. Practice the shape of each answer before you practice the depth.

How to know you are ready

You can define each term without using another undefined term.
You can answer in 30-60 seconds before adding detail.
You can name the most likely follow-up or trap.
You can connect the concept to a simple company example.

Beginner vs other question levels

Level	Example prompts	Ready when
Beginner	What does an investment bank do? What is enterprise value? Walk me through a DCF.	You can explain the concept cleanly before the first follow-up.
Intermediate	What happens if taxes fall in a DCF? How do AP days affect valuation?	You can connect formulas to valuation direction and name the trap.
Advanced	Calculate the LBO IRR. Why would a buyer not pay away all synergy value?	You can answer under pressure and defend the assumption set.

Keep practicing in the full bank.

The samples above are public. The full question bank and adaptive engine live in the practice app.

This beginner investment banking interview question set pairs each prompt with a written direct answer, GOBLIN100 position, and bank context so candidates can compare question difficulty before moving into the full OFFERGOBLIN practice bank.