Investment Analyst Interview Questions With Sample Answers
By Indeed Editorial Team
Published 17 June 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
An investment analyst is a professional who researches and interprets financial data that relates to stocks, bonds and currencies for clients to help them make investment decisions. Interviewers may ask multiple questions to assess whether the candidate is suitable for that role in their organisation. Learning about different investment analyst interview questions may help you prepare for your interview and improve your chances of success. In this article, we cover general background and experience interview questions, highlight in-depth enquiries and offer some example questions and answers.
General investment analyst interview questions
General Investment analyst interview questions may help recruiters understand an analyst's personality better and determine if they're suitable for the company's culture. These questions may also appear in interviews for other professions. Here's a list of general interview questions to help you prepare:
Why would our company hire you?
Why are you leaving your current job?
What are your short- and long-term professional goals?
What do you consider your greatest strength to be?
In what areas do you feel you can improve and how do you plan to do so?
Can you briefly introduce yourself?
What are your salary expectations?
What are your core curriculum passions and interests?
Are you available to work nights and weekends?
Who are our competitors?
Questions about your experience and background
Investment analysts often require specific knowledge, qualifications and experience to perform their tasks effectively. Here's a list of questions interviewers can ask you to learn more about your experience and background:
What do you consider your greatest achievement?
Can you guide us through your resume?
Why does your resume have gaps?
How might you approach a situation where your boss is wrong?
What do you think of your former boss?
What do you think you could have done better in your last job?
Have you ever experienced a difficult situation at work? How did you overcome it?
Do you prefer to take an individual or team approach when working on projects?
What motivates you?
Have you ever led a team to conduct research and analysis for potential investment opportunities?
In-depth interview questions
Interviewers may ask in-depth questions to assess your experience with and understanding of specific processes and tasks. For example, they may want to know if you can do mileage duties like creating analysis reports, calculating the cost of equity or differentiating and interpreting financial statements. Below are examples of in-depth questions recruiters may ask in an investment analyst interview:
Can you describe the relationship between income statements, balance sheets and cash flow statements?
Have you ever advised a client activist investing in a company we wanted to pursue?
What are the types of financial statements for a company?
What is your research and analysis process?
How long does a $10 depreciation affect the three accounting statements?
Can you explain a cash flow statement, highlighting its components?
When would a company issue debt instead of equity?
What are the key components of the weighted average cost of capital, and how do you calculate it?
Is it cheaper to give out equity or debt question marks? Why?
How might you manage an underperforming colleague?
6 investment analyst interview questions with sample answers
Here are six example questions with answers to help you prepare for your investment analyst interview:
1. What makes a good financial model?
Employers may ask this question to test whether you understand the qualities of a good financial model. As an investment manager, you may use financial models to assess the performance of an asset against its expectations. You can mention three to five traits of a good financial model in your answer.
Example: 'It may take a lot of practice to excel in building effective financial models. A good financial model is simple to implement and identifies the key performance indicators of a business. It gives accurate and precise information and handles dynamic situations with ease. It may also facilitate sensitivity analysis and error checking.'
2. If a company issues debt to buy back shares, what happens to the earnings per share?
Employers may ask this question to assess your understanding of buybacks and earnings per share. Companies usually try to repurchase shares to increase their value and reduce the number available on the market. In your answer, you can show the relationship between issuing debt, repurchasing shares and the earnings per share value.
Example: 'When a company issues debt, the after-tax interest expense increases, which causes the value of earnings per share to decrease. Once the company purchases the shares, it reduces the number of shares on the market, which causes the value of earnings per share to increase. The net impact of these two factors may also determine whether the value of earnings per share increases or decreases.'
3. What are some important qualities of a good investment analyst?
Employers may ask this question to evaluate your understanding of what it takes to become an investment analyst. You may cite the job description to show the interviewer you did adequate research on what the company is looking for. Some skills you may include in your answer include communication skills, research skills and time management skills.
Example: 'I believe becoming an investment analyst involves obtaining the right education and developing financial skills because the work often influences investment decisions. Research skills are helpful so you can learn about investments or assets. Communication skills can help you collaborate better with your team and clients. Information technology skills are also important because they can assist you with analysis systems and company applications. An investment analyst may also want to possess skills in statistics and developing solutions, an interest in current affairs, confidence in their decisions and the ability to work under pressure.'
4. Why do you want to be an investment analyst?
Employers may ask this question if you're interviewing for an entry-level position. Your answer may also help them determine your short- and long-term goals and interests. You may also add reasons you enjoy working as an investment analyst to your answer.
Example: ‘I've wanted to become an investment analyst since high school. It was interesting to learn how entrepreneurs start a business and invest wisely to keep it growing. I enjoy numbers and pay very close attention to details. My interest in math influenced me to major in finance at university. I have some experience in the field as I interned with two successful firms before applying for this role. Those internships helped me to develop skills I can apply in the industry.'
5. What do you do when you notice a discrepancy in a cash flow statement?
Interviewers may ask this question to assess your ability to solve problems and determine if you notice details. As an investment analyst, your manager and team may expect you to identify problems and address them constructively. It's helpful to highlight the steps you might take after you notice an issue in the cash flow statement.
Example: 'After I notice an inconsistency, I typically review the numbers to ensure that it's a discrepancy. I would analyse the situation critically and try to find a solution. Next, I'd go to my manager or supervisor to discuss the discrepancy. I'd approach them politely and ensure we make the changes swiftly. In my previous job, I noticed a discrepancy in the cash flow and brought it to my manager who was thankful for how I approached the situation. They were glad that I saw the problem because it could have affected the pricing structure for the next quarter.'
6. How do you handle an unhappy customer?
Employers may ask this question to analyse your customer service experience. It helps them understand your customer service skills and how you approach customer complaints. Your answer may also give the recruiter insights into your interpersonal skills, problem-solving skills and your ability to work in intense or stressful situations.
Example: 'My approach depends on the setting with the client. If we're in a one-on-one meeting, I usually listen to their concerns carefully and try to think of potential solutions. In a meeting with multiple people, I wait until the meeting is over and approach them for a one-on-one meeting to discuss the issue further. I may also approach my manager to get their input on the issue.'
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