Markets and commercial awareness questions
Interest rates, recent deals, sector trends and the market news interviewers expect you to follow.
19 questions
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Questions are shown in English, as they are asked in London. You can practise every one of them in English, Spanish, French, German or Italian.
Markets
1What is the difference between ECM and DCM?Core
What a strong answer covers
- ECM: raising equity, such as IPOs, follow-ons, rights issues, block trades
- DCM: raising debt, such as investment-grade and high-yield bonds
- Both advise on timing, pricing and investor demand
2What happens to bond prices when interest rates rise, and why?Core
What a strong answer covers
- Prices fall: existing fixed coupons become less attractive
- Yield and price move inversely
- Longer-duration bonds are more sensitive
3What is a call option, and what drives its price?Core
What a strong answer covers
- Right, not obligation, to buy at the strike before or at expiry
- Price driven by underlying price, strike, time to expiry, volatility, rates (and dividends)
- Higher volatility and more time increase the value
- Intrinsic vs time value
4What is a bid-ask spread, and what makes it wider or narrower?Core
What a strong answer covers
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5Tell me about a recent M&A deal you followed and whether you think it was a good deal.Intermediate
What a strong answer covers
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6How do higher interest rates affect M&A activity and valuations?Intermediate
What a strong answer covers
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7Tell me about a recent European deal you followed and what you thought of it.Intermediate
What a strong answer covers
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8How do central bank interest rate decisions affect deal activity in Europe?Intermediate
What a strong answer covers
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9Pitch me a company you would invest in.Intermediate
What a strong answer covers
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10Which sector would you most like to work on, and what is happening in it?Intermediate
What a strong answer covers
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