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Think you are meant to become a successful investment banker? Answer these 13 questions to find out!

Written by Fmi.Online

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!

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