Updated: Sep 14, 2019
Once you pass both the initial screening stage and the online testing, you may be invited for a telephone interview. The nature of this interview can vary greatly from company to company in terms of duration, questions asked and prerequisite knowledge. A phone interview is usually broken down the following: introduction, why you and why the firm, STAR based questions, technical questions, closing comments and questions.
Phone Interview Tips:
Find out who will be calling you: run a quick background check on LinkedIn of the person scheduling a call with you (usually either a senior employee or an HR representative). This is especially useful in preparing one or two questions for the interviewer. Do NOT be late for the call, make sure you are free during the allotted slot and ensure that your phone is functioning properly with sufficient credit to make or receive the phone call. Failing to comply with any of the above may result in an immediate rejection - punctuality is a must in finance and excuses do not fare well.
At the beginning of the call, the company spokesperson will introduce themselves and provide a brief background of the role and perhaps the firm. They may also introduce the format of the phone interview. They then ALWAYS proceed with one of these three questions:
"Tell me about yourself"
"Walk me through your CV"
"Why did you apply for this role/company?"
STAR Based Questions:
The STAR method is a technique of answering behavioral interview questions in a structured manner by describing a specific situation, task, action, and result of the situation you are discussing. Behavioral interview questions are questions about specific situations in your past work experience and how you handled them or behaved. The STAR method helps you explain in a simple yet powerful way how you handled specific work situations and challenges.
The STAR format stands for:
S: Situation (an event, project, or challenge faced)
T: Task (your responsibilities and assignments for the situation)
A: Action (steps or procedure taken to relieve or rectify situation)
R: Result (results of actions taken)
"Tell me about a time you worked in a team."
"Tell me about a time you worked under pressure to meet a deadline."
"Tell me about a time you overcame a problem or difficulty."
Interviewers may ask provocative questions that may touch upon the themes of weakness, failure, even lying on your CV. Make sure that you are able to handle these well and be honest about any weaknesses you have - you can turn this question on its head by explaining the steps you have taken to build on on this weakness.
"Describe a time you had to work with a teammate that wasn't cooperating with you."
"Tell me about a time when you failed."
"What are your weaknesses?"
Renowned for stumping candidates and separating the men from the boys and the women from the girls, technical questions are the breaking point for most during the application process. You cannot bullshit your way through these questions, the only way to prepare is to genuinely understand financial theory and NOT rehearse and repeat set answers to common questions. If ever you do not know the answer to one of the questions asked during an interview, do NOT waffle, make something up or indirectly answer the question - simply say "I'm sorry I don't know the answer". Examples include:
"Walk me through a DCF."
"How do you calculate FCF, what growth rate do you use?"
"What is the WACC, how is it calculated and why do we use it in a DCF?"
"What are some of the reasons for M&A?"
"Walk me through the three financial statements, how are these inter-linked?"
"What are the main managerial objectives, what agency conflicts may occur?"
"What is EPS, how is it calculated and list different types of EPS."
"What are the most common multiples used in valuation? "
"List some of the ways to valuate a company."
"Why do companies use cash to finance acquisitions?"
"Tell me about a deal that you've recently read about."
Walk me through a cash flow statement."
Instead of giving you the answers, it will be much more effective for you to research these online and find them yourselves (think of this as homework). My go to guide for these technical questions is the Wall Street Oasis Investment Banking Interview Guide, which helped me to understand basic financial theory and to tackle complex technical questions. Trust me, the return on your investment on a guide like this is exponential and will increase your chances of passing the application process dramatically.
Prepare a couple of questions for the interviewer at the end of the call. It may be in your interest to find out about the logistics of the internship, such as the duration of the job, whether they provide accommodation or any financial support in relocating to the city. Asking good questions shows that you are well prepared and that you are interested in the position. At the close of the phone interviewer, thank them and wait for them to hang up. Review how