Preview Questions Investment Banker | Role Specific Skill

Question 1: Which factor is most critical when determining the cost of capital in an M&A deal?

Which action should you take?

Choose only one option

The expected return on the equity capital invested by the buyer

The tax rate applied to the target's earnings

The capital structure of the target company

The weighted average cost of capital (WACC) for the combined company

Question 2: Which international organization issues guidelines for combating financial crime?

Which action should you take?

Choose only one option

WTO

FATF

IMF

BIS

Question 3: What is the primary purpose of a risk-adjusted return metric?

Which action should you take?

Choose only one option

Compare returns accounting for risk

Maximize returns irrespective of risk

Predict future performance

Eliminate all forms of risk

Question 4: Which method is typically used to calculate the weighted average cost of capital (WACC) in a financial model?

Which action should you take?

Choose only one option

The bond yield model

The capital asset pricing model (CAPM)

The return on equity model

The market value weighted average of debt and equity

Question 5: How do you balance client confidentiality with the need to share relevant information during a merger and acquisition deal?

Which action should you take?

Choose only one option

Share confidential information under non-disclosure agreements (NDAs)

Disclose information based on client consent

Limit disclosure to senior clients only

Ensure all communications are compliant with regulatory standards

Question 6: Which forecasting method uses historical data to predict future trends?

Which action should you take?

Choose only one option

Time-series analysis

Qualitative analysis

Delphi method

Regression analysis