What does an investment bank actually do?

Advises companies on major transactions such as M&A and helps them raise capital through equity and debt offerings. The bank earns fees for advice, underwriting, execution, and distribution.

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

A commercial bank takes deposits and makes loans. An investment bank advises on M&A and capital raising, underwrites securities, and helps institutional clients access capital markets; universal banks do both.

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

Sell-side firms, such as investment banks, sell advice, securities, and market access. Buy-side firms, such as PE, hedge funds, and asset managers, invest capital and buy securities or companies.

What are the main divisions inside a bank?

For a beginner: investment banking/advisory, capital markets, sales & trading/markets, equity research, asset or wealth management, risk/compliance, and operations. IB recruiting usually focuses on advisory and capital markets.

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

Builds financial models, creates pitch books and process materials, researches companies and markets, tracks diligence, coordinates workstreams, and checks details for senior bankers and clients.

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.

What do you think the value-add of investment banking is to the US economy? Why?

Investment banks add value by efficiently channeling capital from savers to productive enterprises, facilitating asset reallocation through M&A, enabling risk hedging, providing market liquidity, and preserving going-concern value in distress—collectively reducing friction and lowering the economy's cost of capital.

Name a challenge that the investment banking industry is currently facing?

Fee-pool compression from sustained low deal activity, as higher interest rates suppress M&A and LBO volumes while structural pressures—private credit disintermediation, rising regulatory capital costs, and boutique market-share gains—erode margins even when volumes eventually recover.

A stock is an ownership claim on a company. Shareholders are residual owners: they benefit after creditors are paid, through dividends, voting rights, and price appreciation.

A bond is debt. The issuer borrows money and promises interest payments plus principal repayment; bondholders are creditors and sit ahead of equity holders in the capital structure.

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

Debt is often cheaper and avoids ownership dilution, but creates required interest/principal payments, covenants, and bankruptcy risk. Equity is more flexible and has no required repayment, but dilutes ownership and is usually more expensive.

Which is cheaper to raise capital, debt or equity, and why?

Debt is cheaper than equity because interest payments are tax-deductible, reducing the after-tax cost, and debtholders hold senior claims with contractual cash flows, so they bear less risk and accept a lower required return.

What does an investment bank actually do?

Advises companies on major transactions such as M&A and helps them raise capital through equity and debt offerings. The bank earns fees for advice, underwriting, execution, and distribution.

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

A commercial bank takes deposits and makes loans. An investment bank advises on M&A and capital raising, underwrites securities, and helps institutional clients access capital markets; universal banks do both.

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

Sell-side firms, such as investment banks, sell advice, securities, and market access. Buy-side firms, such as PE, hedge funds, and asset managers, invest capital and buy securities or companies.

What are the main divisions inside a bank?

For a beginner: investment banking/advisory, capital markets, sales & trading/markets, equity research, asset or wealth management, risk/compliance, and operations. IB recruiting usually focuses on advisory and capital markets.

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

Builds financial models, creates pitch books and process materials, researches companies and markets, tracks diligence, coordinates workstreams, and checks details for senior bankers and clients.

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.

What do you think the value-add of investment banking is to the US economy? Why?

Investment banks add value by efficiently channeling capital from savers to productive enterprises, facilitating asset reallocation through M&A, enabling risk hedging, providing market liquidity, and preserving going-concern value in distress—collectively reducing friction and lowering the economy's cost of capital.

Name a challenge that the investment banking industry is currently facing?

Fee-pool compression from sustained low deal activity, as higher interest rates suppress M&A and LBO volumes while structural pressures—private credit disintermediation, rising regulatory capital costs, and boutique market-share gains—erode margins even when volumes eventually recover.

A stock is an ownership claim on a company. Shareholders are residual owners: they benefit after creditors are paid, through dividends, voting rights, and price appreciation.

A bond is debt. The issuer borrows money and promises interest payments plus principal repayment; bondholders are creditors and sit ahead of equity holders in the capital structure.

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

Debt is often cheaper and avoids ownership dilution, but creates required interest/principal payments, covenants, and bankruptcy risk. Equity is more flexible and has no required repayment, but dilutes ownership and is usually more expensive.

Which is cheaper to raise capital, debt or equity, and why?

Debt is cheaper than equity because interest payments are tax-deductible, reducing the after-tax cost, and debtholders hold senior claims with contractual cash flows, so they bear less risk and accept a lower required return.

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?
Advises companies on major transactions such as M&A and helps them raise capital through equity and debt offerings. The bank earns fees for advice, underwriting, execution, and distribution.
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. An investment bank advises on M&A and capital raising, underwrites securities, and helps institutional clients access capital markets; universal banks do both.
Work full answer in app
GOBLIN100 #3OFFERGOBLIN
What's the difference between sell-side and buy-side?
Sell-side firms, such as investment banks, sell advice, securities, and market access. Buy-side firms, such as PE, hedge funds, and asset managers, invest capital and buy securities or companies.
Work full answer in app
GOBLIN100 #4OFFERGOBLIN
What are the main divisions inside a bank?
For a beginner: investment banking/advisory, capital markets, sales & trading/markets, equity research, asset or wealth management, risk/compliance, and operations. IB recruiting usually focuses on advisory and capital markets.
Work full answer in app
GOBLIN100 #5OFFERGOBLIN
What does a junior banker actually do day-to-day?
Builds financial models, creates pitch books and process materials, researches companies and markets, tracks diligence, coordinates workstreams, and checks details for senior bankers and clients.
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 #7Evercore
What do you think the value-add of investment banking is to the US economy? Why?
Investment banks add value by efficiently channeling capital from savers to productive enterprises, facilitating asset reallocation through M&A, enabling risk hedging, providing market liquidity, and preserving going-concern value in distress—collectively reducing friction and lowering the economy's cost of capital.
Work full answer in app
GOBLIN100 #8Citi/ Superday
Name a challenge that the investment banking industry is currently facing?
Fee-pool compression from sustained low deal activity, as higher interest rates suppress M&A and LBO volumes while structural pressures—private credit disintermediation, rising regulatory capital costs, and boutique market-share gains—erode margins even when volumes eventually recover.
Work full answer in app
GOBLIN100 #9OFFERGOBLIN
What is a stock?
A stock is an ownership claim on a company. Shareholders are residual owners: they benefit after creditors are paid, through dividends, voting rights, and price appreciation.
Work full answer in app
GOBLIN100 #10OFFERGOBLIN
What is a bond?
A bond is debt. The issuer borrows money and promises interest payments plus principal repayment; bondholders are creditors and sit ahead of equity holders in the capital structure.
Work full answer in app
GOBLIN100 #11OFFERGOBLIN
Why would a company issue debt or equity? What are the pros and cons of each?
Debt is often cheaper and avoids ownership dilution, but creates required interest/principal payments, covenants, and bankruptcy risk. Equity is more flexible and has no required repayment, but dilutes ownership and is usually more expensive.
Work full answer in app
GOBLIN100 #12J.P. Morgan
Which is cheaper to raise capital, debt or equity, and why?
Debt is cheaper than equity because interest payments are tax-deductible, reducing the after-tax cost, and debtholders hold senior claims with contractual cash flows, so they bear less risk and accept a lower required return.
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.

These twelve samples 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.

Run GOBLIN100

The ordered 100-question ramp. Definitions, linkage, and judgment, in order. Best when you want a clear path from where you are to interview-ready.

Start ramp

Practice in GOBLINMODE

Adaptive selection across the full bank. Pulls weak areas first and cycles questions you keep missing. Best for refining a working answer set.

Open GOBLINMODE

Frequently Asked Questions

What are beginner investment banking interview questions?

How many beginner investment banking questions should I practice?

Are beginner technical questions enough for first rounds?

Should I memorize beginner IB answers?

What should I study after beginner IB interview questions?

How long should I prepare for investment banking interviews?

What is the most common beginner investment banking interview question?