GUEST COMMENT: A complete and total primer for investment banking assessment centres

If you make it through to the final round of an investment banking interview process, you WILL encounter an assessment centre. Almost all banks use them.

At that assessment centre, you can expect to come across the following:

1) An individual presentation to a business representative

2) A group exercise

3) A series of psychometric tests

4) A series of final round interviews (normally 3)

1. The individual presentation

Expect to be given a note from the firm's research department or a Powerpoint presentation. You'll get 15-20mins to prepare in a quiet room and then will be asked to present the idea/concept or research to a business representative.

Examples of the kind of presentation or note you can expect include: an upgrade or downgrade note on a stock or sector, global market commentary, the house view on the oil price.

You will be examined on a score sheet filled in by the assessor. They will have individual criteria they are looking for and you get a point/comment for each that you do or do not mention. There may be specific information points contained within the note/research piece which they are interested to see if you attribute importance to it and mention it in your presentation, or they could be your ability to present, summarise and project the message well in your delivery.

You will also be questioned on the topic.

Key to performing well: Identify the main topics in the report. Present them accurately. Don't read directly from the presentation. Don't spend too much time on one point. Ensure your presentation has a beginning, middle and end. Make sure you round off the presentation so that the assessor knows you've finished.

2. The group exercise

Expect to be placed in a room with a group of candidates and an assessor.

Similar to your individual presentation you will either be given some material to work with, expand on and present or you may be asked to generate a trade idea or formulate a quick business plan for a new idea or product.

The group is under pressure to work together, generate an idea and work out who will present what part. Often it isn't the idea the assessors scrutinize but the way you work together and who delivers well.

Key to performing well: Talk to the entire room, not just the assessor. Participate in group discussions; behave considerately and professionally towards your peers; be confident but not bossy; encourage others in the group. Remember, you are being assessed on how well you perform as part of a team.

The assessor may single you out and ask you a question on your particular part or they may ask a question to the group. It is important not to talk over your peers but to make sure you do answer questions and are vocal.

3) The psychometric tests

These will be formal, timed tests similar to those you encountered in the early stages of the application process. They will not take place online, but usually on a printed sheet.

For more information on performing well in psychometric tests, click here.

4) The interviews

Expect a technical interview with members of the business. While first round interviews are about competency and fit, interviews in assessment centres are more focused on evaluating your ability to do the job.

Technical questions will depend on who is interviewing you i.e a yield guy vs. a commodities guy or equities guy will all tend to ask their questions based on their product.

They may take a general route and ask you macroeconomic questions....questions revolving around inflation, unemployment, GDP, FX and your view on the economy.

· What is the dollar/yen exchange rate today? Where do you think it will be in one year and why?

· What is the current price of oil? What have we seen in the last 3-6months? Where will it go?

· What is your view on the current sovereign debt situation?

You may be asked questions such as:

· You purchase some Ford Motor Company bonds. How can you hedge your interest rate risk?

(go short treasuries, so you are left only with the firm-specific Ford risk)

· Graph the price-yield relationship of bonds.

· What is an inverted yield curve?

· Describe what you understand of convexity?

· How would you explain credit spread?

· If the yen/dollar exchange rate is 110 yen/$ today and the one year forward rate is 115

yen/$, what does this imply?

· What is a call option? Would a price of a call option go up or down when the maturity of the option is longer?

There are also the brainteaser style questions:

· You have nine balls, one of which is heavier than the others. You have a balance that doesn't tell you how heavy each ball is. You can only use the balance twice. How can you identify the heavier ball?

· If you have 128 players on the football pitch and each player shakes each player's hand once, how many handshakes are there in total?

· If one tap fills up a swimming pool in 2 hours and another tap fills it in 4 hours, how quick will it be if both fill them up at the same time?

· What is the sum of 1 to 100?

Key to performing well: Be personable and professional. But most of all, prepare. Make sure you know the structure of the firm and the structure of the grad scheme. There is nothing worse than a candidate who hasn't realised he is not interviewing for a rotational programme and then spends the next 30mins banging on about wanting to experience various desks to gain a better insight into his strengths.

PRACTICE AS MANY BRAINTEASERS AS YOU CAN! The key to questions you can't answer is to make a good intelligent guess and try to explain how you are thinking about the answer - what is your thought process?

I always remember when i got a real nasty volatility question which the interviewer turned into an FX question and i got lost. My formula was right but my maths went to pot! He was kind enough to walk me through my mistake so I took a breath and said, 'Oh I see, what you are saying is that I should have done X,Y,Z.' He was impressed that I had listened, picked it up quickly and we moved on. He also recommended me as a good hire!

Finally

During the assessment centre, focus on each exercise as it happens. The overall score is based on a summation of your scores in every assessment and what your assessors thought of you as a whole. If you suspect one task did not go very well, don't give up, just concentrate on the next one.

Assessment centres are about endurance as much as your ability to do the role. They are aimed at trying to test your focus over a sustained period of time under pressure.

The author is an anonymous junior in a bulge bracket bank in London.