Bank Interview Question with an Answer: What would you do if I gave you $ 100,000?

“If I gave you $ 100,000 right now, what would you do with it?” Ah, the classic “does this guy have a brain?” question. Must be one of the easiest investment banking interview questions You’ll ever have a lot of fun once you’ve understood your 5-part answer.

But to crush it you must avoid the error that kills the answer that approximately 2/3 of the students win; they think the banker asks them what they I’d do with the $ 100,000 if they had it personally.

And although the question seems to be directed at you and your personal situation, it is not. Nor is it directed at the banker who interviews you.

So how are you supposed to handle this question? As a budding consultant, you must first answer this question with a question

“Who is the investor and what are his objectives, risk profile, etc.?”

Yes it’s correct. Put on your $ 60k a year financial planner hat and inquire about the type of return mythical investor wishes, cash flow requirements over time, your personal tax situation, preferred asset classes, favorite industries, etc.

PS Unlike management consulting case interviews, don’t expect a banker to offer you so much additional information – 2 or 3 points, and they are usually good to go. After all, this is a small question in investment banking interviews.

Based on this new information, you can explain what you would do. Suggesting an investment strategy that takes into account, even remotely, this new information will give you an A here.

If you want to take your answer to an A + level …

• Build a various portfolios of stocks, bonds, real estate, cash and other alternative asset classes. Students who don’t mix asset classes and instead offer only one in a “Oh risk aversion, then I’d invest the money in bonds” style are idiots. That’s a hard-hitting investment strategy with zero ounces of financial finesse – different asset classes offer different consequences for risk / return / cash flow / tax, etc., so mix and match with that in mind.
• Mention how much of each in $ amounts, no% – This is a small point, but it can make a big difference for bankers.
• Y explain assignments use the investor’s personal information, in particular their risk profile, income requirements over time, lifestyle goals and personal tax situation.

But when all is said and done don’t be so sophisticated get confused! Wondering aloud “Oh, but wait, maybe …” as if your damn Drew Barrymore would undo all your hard work in an instant.

PS If the bankers turn around and say the mythical investor is in fact you – and therefore what would “you” do with $ 100,000? Use the same response strategy as above, but adjust it to the circumstances of your youth. Tip: a time horizon of more than 40 years = abundant stocks!