It is no doubt that investment banking gives the impression of a glamorous career from the outside. However, while it does offer perks, it also requires a great deal of knowledge, resilience, and skill to make it as a successful investment banker.
To test where you stand in your proficiency as an aspiring i-Banker, here’s an interactive quiz. Each question answered correctly will get you a point. Add your points in the end and check to see how well you bode and where you need improvement.
Q1. Mergers and acquisitions mean the same thing
Options:
1. True – they are synonyms
2. False – they mean different things
CORRECT ANSWER: False
Q2. What is the crown jewel defence?
Options:
1. The target company tries to take over and acquire the bidder instead of letting themselves get acquired.
2. Under this strategy, the target company decides to sell its most valuable assets/branches of business.
3. Top executives and employees are given extra benefits and severance packages in case the company gets acquired and they are terminated.
CORRECT ANSWER: Option 2
Q3. Which type of listing provides higher liquidity to the company?
Options:
1. Secondary listing
2. IPO
3. Dual listing
4. Cross-listings
CORRECT ANSWER: Option 3
Q4. All IPO-listed companies are financially stable
Options:
1. True
2. False
3. Maybe
CORRECT ANSWER: False: this is a big myth!
Q5. Which college major is needed to become an investment banker?
Options:
1. Finance
2. Economics
3. Arts/Humanities
4. No one college major will get you into i-Banking. They accept all majors!
CORRECT ANSWER: Option 4: Skills matter the most!
Q6. Which investment bank is currently the world leader?
Options:
1. Goldman Sachs
2. JP Morgan
3. Barclays
4. Bank of America
CORRECT ANSWER: Option 2
Q7. In the corporate finance life cycle, sales are the highest in which stage?
Options:
1. Growth
2. Decline
3. Maturity
4. Introductory
CORRECT ANSWER: Option 3
Q8. Investment bankers only have one job: to raise capital
Options:
1. True
2. False
CORRECT ANSWER: FALSE! i-Banking has many divisions and diverse roles.
Q9. Which is the world’s largest stock exchange?
Options:
1. Bombay Stock Exchange
2. National Stock Exchange
3. New York Stock Exchange
4. London Stock Exchange
CORRECT ANSWER: 3.
Q10. Where would you find the world’s oldest stock exchange?
Options:
1. India
2. United States of America
3. United Kingdom
4. Amsterdam
CORRECT ANSWER: 4. The Amsterdam Stock Exchange is touted as the oldest securities market in the world. It is believed to have become operational in 1602 after the establishment of the Dutch East India Company (VOC).
Q11. Which of these is a method for company valuation?
Options:
1. Discounted Cash Flow
2. Future Cash Flow
3. Current Cash Flow
4. Shares Sold
CORRECT ANSWER: 1. The DCF method calculates a company’s valuation based on expected future cash flows
Q12. Which term is used to describe standard settlement instructions added to transactions?
Options:
1. Lifecycle of a trade
2. Trade enrichment
3. Trade payout
4. Trade settlement
CORRECT ANSWER: 2.
Q13. The forex market operates 24/7, 5 days a week
Options:
1. True
2. False
CORRECT ANSWER: 1.
RESULTS:
If your score falls between:
1-3: you need serious assistance with your knowledge and skills
4-6: you are getting there! A little brushing up will help you get on track
7-8: Congrats, you are mostly set to become an investment banker!
To expand your knowledge base and ensure you have both theoretical and hands-on practice in this industry, you can avail a range of courses by FMI. These include Investment Banking, Global Markets, M&As, Foreign Exchange Markets, Portfolio Management, and so on. With the help of these resources, you will stand out from the typical applicant and already have a solid foundation before you begin working in the complex investment banking world!
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