Sometimes it’s not about WHO you know but WHAT you know . . . even on Wall Street SO, YOU WANT TO WORK ON WALL STREET. You’ve come to the right place. Filled with sample questions taken from actual interviews, How to Get a Job on Wall Street is like your own personal coach helping you land the job of your dreams. This nuts-and-bolts guide has no gimmicks or tricks. Instead, it shows you how to “wow” interviewers with nothing more than old-fashioned knowledge, confidence, and professionalism. Before you start sending out your résumé, learn everything you need to know about: THE ROLE FINANCIAL INSTITUTIONS PLAY IN SOCIETY - HOW TO READ BALANCE SHEETS AND INCOME STATEMENTS - THE FOUR MAIN CONCEPTS OF FINANCE - COMPANY VALUATION BASICS You’re about to enter a high-stakes business, and those who do the hiring take their job seriously―so you can’t just “wing it” on an interview. How to Get a Job on Wall Street provides everything you need to know, so you can deliver when it counts. SCOTT HOOVER is an associate professor of finance at Washington and Lee University. He teaches a variety of finance courses, including corporate finance, multinational corporate finance, investments, and real estate finance. Hoover served for eight years as advisor to the Williams Investment Society. He lives in Lexington, VA. SCOTT HOOVER is an associate professor of finance at Washington and Lee University. He teaches a variety of finance courses, including corporate finance, multinational corporate finance, investments, and real estate finance. Hoover served for eight years as advisor to the Williams Investment Society. He lives in Lexington, VA. How to Get a Job on WALL STREET Proven Ways to Land a High-Paying, High-Powered Job By Scott Hoover The McGraw-Hill Companies, Inc. Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved. ISBN: 978-0-07-177853-4 Contents PrefaceAcknowledgmentsIntroductionChapter 1 Getting the JobChapter 2 What the Firm Is Looking ForChapter 3 The Résumé and InterviewsChapter 4 Overview of the Financial WorldChapter 5 Accounting BasicsChapter 6 Finance BasicsChapter 7 Valuing CompaniesChapter 8 Recent Financial EventsChapter 9 Suggested ReadingsGlossary of Financial TermsBibliographyIndex Excerpt CHAPTER 1 GETTING THE JOB Successful candidates understand what a bank is looking for. They prepare forinterviews on a daily basis, beginning well beforehand, so that they can build abase of knowledge on which to draw. In doing this, they prepare a résumé thathighlights what they have to offer a bank. Finally, they use the interview tostrengthen their case rather than weaken it. In this chapter, we cover threeareas. First, we discuss the qualities and characteristics a bank looks for incandidates. Second, we discuss the importance of the résumé along with a fewbasic pieces of advice. Third, we discuss the dos and don'ts of the interviewitself. AREAS OF FINANCE The finance world typically is divided into the buy side and the sell side , terms that describe those who are tasked with buyingsecurities on behalf of themselves or others and those who are tasked withselling securities on behalf of themselves or others. The sell side consistslargely of units within the major investment banks (e.g., Goldman Sachs,JPMorgan), middle market investment banks (e.g., Harris Williams, LincolnInternational), and smaller boutiques that tend to specialize (e.g., HowardWeil, which specializes in energy services). The buy side also includes unitswithin the major investment banks but in addition covers mutual funds, privateequity funds, and hedge funds. Commercial banks are also major players, actingas intermediaries between those who wish to save money and those who wish toinvest those savers' money. In recent years, several major investment banks havejoined forces with commercial banks to create much-needed balance sheetstability. For example, Bank of America and Merrill Lynch merged in late 2008 toform a massive organization with over $2 trillion in assets. In Chapter4 , we will return to this topic by discussing the different types offinancial services firms. HIERARCHY OF A BANK The hierarchy of a financial services firm can differ from sector to sector andfirm to firm but is relatively consistent in investment banks. Generallyspeaking, there are five levels in banks: analysts, associates, vice presidents,directors, and managing directors. Analysts are the entry-levelanalytical force of the firm. As entry-level workers, they are responsible foranything their superiors deem appropriate. They typically work more hours thantheir superiors, with those in investment banking sometimes being asked to work16-plus hours per day for extended periods. Although most analysts leave thebank after two or three years, the very best of the analyst class are asked tostay at the firm and be promoted to associates. In addition, banks often hirestudents directly from MBA programs into assoc