Thinking outside the box: Navigating unconventional interview questions with confidence

When it comes to landing a job in investment banking, it’s not just about mastering the technical questions. Interviewers regularly include unconventional questions to test a candidate’s critical thinking, problem-solving, and creative skills. Investment banks are known for asking unique questions that can catch interviewees off guard. Let’s explore some examples and how to approach them. 

One type of unconventional question is estimation or brainteaser questions. These questions are designed to assess a candidate’s ability to make reasonable approximations, apply logic, and think critically. For instance, questions like “How many taxis are there in Sydney?” or “Estimate the number of ATMs in Australia” may be asked to gauge a candidate’s analytical skills and ability to use data and reasoning to arrive at an estimate. 

Another type of unconventional question is the hypothetical or creative question. These questions assess a candidate’s ability to think outside the box and apply financial concepts to unique situations. For example, questions like “How would you value a cow?” or “If you were a brand, what would your tagline be?” may be asked to assess a candidate’s creativity, adaptability, and communication skills. 

Some investment banks have also been known to ask questions that require candidates to connect their personal interests or aspirations with the job. For instance, questions like “If you could have any superpower, what would it be and how would you use it to excel in investment banking?” may be asked to evaluate a candidate’s ability to articulate their goals and aspirations, and how they can relate them to the role they are applying for. 

Moreover, interviewers may ask candidates to simplify complex concepts for a layman. For example, questions like “How would you explain the concept of compound interest to a 5-year-old?” may be asked to assess a candidate’s ability to communicate complex financial concepts in a simple and understandable manner. 

So, how should you approach these unconventional questions? Firstly, it’s important to remain calm and composed. Take a moment to gather your thoughts and structure your response. Start by clarifying any assumptions you are making and explain your reasoning clearly. Don’t worry about arriving at an exact answer, as these questions are more about showcasing your problem-solving skills, critical thinking, and ability to communicate effectively. 

To prepare for these types of questions, research the industry, company, and market trends. Practice estimation techniques, logical reasoning, and critical thinking skills. Be ready to connect your personal interests, experiences, or aspirations with the job you are applying for. And don’t forget to polish your communication skills to be able to explain your thought process clearly. 

When you work with xceeda we have the industry professionals to coach you through the interview process. Learn more about becoming an xceeda graduate here.

Here are 10 examples of estimation and brainteaser questions that have been known to be asked in investment banking interviews globally: 

1. Estimate the total number of cars in New York City. 
2. Calculate the annual revenue of a hypothetical coffee chain with 100 stores. 
3. Estimate the market size for smartphones in India. 
4. Calculate the value of an imaginary company based on given financial statements. 
5. Estimate the number of golf balls that can fit in a Boeing 747 airplane. 
6. Calculate the potential revenue of a new subscription-based streaming service. 
7. Estimate the total assets under management (AUM) of a leading global investment firm. 
8. Calculate the potential return on investment (ROI) for a real estate development project. 
9. Estimate the number of daily active users for a popular social media platform. 
10. Calculate the value of a hypothetical IPO for a tech start-up with given financial projections. 

These questions are designed to assess a candidate’s ability to think critically, apply financial concepts, and arrive at reasoned estimates. They require candidates to make assumptions, use data, and apply logical reasoning to arrive at a plausible and well-supported answer. Successful candidates will be able to demonstrate their analytical skills, problem-solving ability, and financial acumen in providing well-reasoned estimates for these types of questions. 

Here’s how you might go about answering the first question.

1. Estimate the total number of cars in New York City. 

Estimating the total number of cars in New York City requires making educated assumptions and considering various factors. Here’s a rough estimate based on available data: 

Population: New York City’s population is approximately 8.4 million people. 

Car Ownership Rate: The car ownership rate in urban areas like New York City tends to be lower compared to suburban or rural areas. Let’s assume an average car ownership rate of 0.5 cars per person. 

Public Transportation Usage: A significant portion of New Yorkers rely on public transportation instead of owning cars. Let’s estimate that 40% of the population does not own cars. 

Household Size: The average household size in New York City is around 2.6 people. 

Commercial Vehicles: New York City has a large number of commercial vehicles, including taxis, ride-sharing vehicles, delivery trucks, and fleet vehicles. Let’s estimate that these vehicles constitute about 10% of the total number of cars. 

Based on these assumptions: 

Total population: 8.4 million 

Car ownership rate (0.5 cars/person): 8.4 million * 0.5 = 4.2 million cars 

Public transportation users: 8.4 million * 0.4 = 3.36 million people 

Adjusted population (excluding public transportation users): 8.4 million – 3.36 million = 5.04 million people 

Adjusted car ownership rate (0.5 cars/person): 5.04 million * 0.5 = 2.52 million cars 

Commercial vehicles (10% of total cars): 0.1 * (4.2 million + 2.52 million) = 672,000 cars 

Adding the estimated number of private cars and commercial vehicles: 

Total estimated cars = 4.2 million (private cars) + 672,000 (commercial vehicles) = 4,872,000 cars 

Therefore, based on these assumptions, there could be approximately 4.87 million cars in New York City.  

Keep in mind that this is a rough estimate however what it demonstrates is a candidate’s ability to think critically, apply financial concepts, and arrive at reasoned estimates.