Investment Banking
Prepalyst has 20 fig coverage interview questions with model answers, covering regulatory capital, rote against cost of equity, and why ev is meaningless. Every question is graded on technical accuracy, completeness and interview communication. Practice is free.
The foundational asset management question. Fee-based business models are different from banking.
Explain the asset management business model. How do they generate revenue, and what are the key drivers of profitability?
The foundational FIG question. Every banking interview starts with the business model.
Walk me through how a commercial bank generates profit. What are the main revenue streams and cost drivers?
Fintech is disrupting FIG. This tests understanding of the competitive landscape.
What are the key differences between fintech companies and traditional banks? How do their business models and economics compare?
An insurance FIG interviewer asks this when testing whether a candidate can connect risk transfer to earnings and capital.
You are preparing a P&C insurer earnings preview. Explain what reinsurance is, the two common structures, and how buying more of it changes the insurer's earnings, risk and capital needs.
Insurance is a cyclical business. This tests whether you understand the industry dynamics.
Explain the insurance underwriting cycle. Why do insurance margins fluctuate so much, and what drives the cycle?
A first-round FIG interviewer uses this to see whether you understand why deposits matter beyond their reported balance.
A regional bank says it has $50 billion of deposits. What makes those deposits valuable, and what would make you discount that headline number?
Asset management M&A is driven by scale and distribution. This tests understanding of industry dynamics.
What are the key considerations when acquiring an asset manager? How do you value a business that's essentially people and reputation?
CECL/IFRS 9 changed how banks reserve for losses. This tests understanding of current accounting.
Explain how banks calculate loan loss provisions under CECL. How does this differ from the old incurred loss model, and why does it matter for earnings volatility?
The float is what makes insurance unique. This tests understanding of the investment side of the business.
Explain the insurance float and how insurers invest it. What are the constraints on investment strategy, and how does this affect profitability?
The core FIG valuation question. EV/EBITDA doesn't work for financials.
Why doesn't EV/EBITDA work for banks, and what metrics do you use instead?
Asset management valuation is different from banking. This tests understanding of fee-based models.
What metrics do you use to value an asset manager, and why is P/E more relevant than P/TBV?
Insurance valuation uses different metrics than banking. This tests sector-specific knowledge.
What metrics do you use to value an insurance company, and how do they differ from bank valuation metrics?
A FIG associate gives this as a short earnings-model check before asking for the credit-cycle implication.
A bank reports $2,400m of net interest income, $900m of fee income, $1,850m of non-interest expense, $420m of provision for credit losses, and $180m of tax expense. Calculate pre-provision net revenue (PPNR), pre-tax…
Post-2008, capital ratios are the first thing FIG analysts discuss. This tests regulatory knowledge.
Explain the key capital ratios that banks must maintain under Basel III. Why do they matter for valuation?
A FIG superday case tests whether you can connect a bank's securities mark to its ability to pay for an acquisition.
A bank has $100bn of risk-weighted assets and $11bn of CET1 capital, so its CET1 ratio is 11.0%. It holds $20bn of available-for-sale securities with a $2bn unrealised loss in accumulated other comprehensive income…
Bank M&A has unique considerations. This tests sector-specific deal knowledge.
What are the key considerations when valuing a bank acquisition? How does it differ from valuing a non-financial company acquisition?
Rate sensitivity is the single most important factor for bank earnings. This tests quantitative understanding.
A bank has $100 billion in interest-earning assets with an average yield of 5% and $80 billion in interest-bearing liabilities with an average cost of 2%. What happens to net interest income if rates rise by 100bp,…
A FIG case uses reserve development to test whether you can distinguish a one-time accounting charge from a signal about underwriting quality and capital capacity.
A P&C insurer reports a 5-point adverse prior-year reserve development charge, taking its combined ratio from 96% to 101%. Management calls the charge isolated and maintains its buyback plan. How would you assess whether…
A FIG superday tests whether you can challenge a management presentation that reports strong AUM growth but weak underlying client demand.
An active asset manager reports AUM up 12% year over year, calls it evidence of strong demand, and is seeking a premium valuation. Your work shows market appreciation contributed 15%, net client flows were negative 3%,…
FIG coverage interviews test whether you can value a business where debt is inventory.
Why do some banks trade above tangible book value and others below? Give me the relationship, and explain what a bank can actually do about it.
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.