Morgan Stanley Assessment Centre – Investment Banking Division

by Mai Le | Aug 19, 2016

*** Write-up on Morgan Stanley Assessment Centre interview questions and details of the sessions from Cover Letter Library candidates’ experiences. This is based on MS Assessment Centre for Investment Banking Division in London in 2021. There may be some variations depending on the offices or other new updates to the recruitment practice by the bank – so please use this as rough reference only ***

Morgan Stanley Assessment Center

The AC is split into 4 sections, a numerical test, an individual exercise, 2 interviews and a group exercise.

The interviews cover a broad spectrum i.e. if you have the relevant skillset for Investment Banking Division in banking, your understanding of investment banking and the division, commercial awareness. They will also ask CV, motivation and competency based questions.

Below is a selection of the questions you are likely to be asked based on feedback I have received. I encourage you to be prepared for the variety of questions listed below. The more prepared you are the more likely you are to do well.

1) Numerical Test
This is a pretty standard test – 20 minutes for 20 questions. Practice as many numerical tests as you can.

2) Individual Exercise:

You will be given a report on a company for which you have to act as advisor for, and you will be given 2 other companies that are potential acquisition targets. You will have 20 minutes to go through the information, and make a recommendation as to which company to acquire, based on strategic, operational and financial reasons. You will then have to do a 10 minute presentation to a VP/MD, which was followed by a 20 minute Q&A session.

The company in question has a similar business model to Groupon, and could either expand in the US or Europe based on the company we picked to acquire. The MD will ask many questions to test your assumptions as to which company is better to acquire, so you need to be wary of both sides of the argument and have valid reasons to support your choice. You should be preparing your answer with the knowledge of the following:

 One of the target companies has had 6 acquisitions in the last 12 months. Think about the impact that would have had on the organisations culture. It would be bad because of the differing strategies and views of these 6 child companies etc.

 The MD would also try to introduce new information to try and change your decision. E.g. he may point out that the deal needs not be an all cash deal, some stock swaps could be issued, and that we also did not need to pay 100% of the fees on day 1. Bear this in mind when doing your analysis. It may be advisable to do your analysis first and consider how it will change should this information be provided.

 You should also be wary about the currency – i.e. one company’s finances are in USD and another in EUR.

3) Interviews:
You will have 2 interviews with VPs/MDs. These interviews were very similar to those in the first round, and have almost the same structure. However, there may be more brain teasers as listed below:

1) What is 2/3 of 110?
2) I have 20 socks, of which 10 are Red and 10 are Black. I want to draw 2 of the same colour – how many socks do I draw to be absolutely sure?
3) I now want to draw 2 Black socks. How many must I draw to be absolutely sure I have 2 Black socks?
4) I used to run to Green Park, which is 10km away at 10km/h. However, I’m not that fit anymore and have to stop every kilometre. How much time do I take these days?
5) I bought a 1Y Bond for $100, and it has a coupon of $5. I am told that the yield is now 20%. Does the price of the bond go up or down? What is the price of the bond now?
4) Group Exercise
This is similar to the individual exercise and you will be advising the same company, except that there are now 5 options instead of 2 options to make. You will have 30 minutes to make the decision, and then your group will have 10 minutes to present your findings followed by a Q&A session. It may be advisable to use the approach of eliminating 3 options first, and then leaving it down to the 2 best options.

The presentation:
You group has to decide how the presentation is structured. An example is below:

Person 1 – Introduction and a bit about the company strategy and what you chose Person 2 – The options we eliminated and why
Person 3 – Why we chose our final option out of the 2 remaining
Person 4 – Conclusion, and how we chose to finance the deal and why

The one that might be of concern is the Individual exercise as it something different that you may not have tried before so it might be worth practicing and thinking about it before the AC. Think about acquisitions, deal rationale and various financing options. Familiarise yourself with currency issues in acquisitions and pros and cons when considering an acquisition.

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Written By Mai Le

Mai worked for Goldman Sachs in London for many years as an investment banking associate. When she was at LSE, her seniors used to pass her notes of their interviews as well as their cover letters, which helped her tremendously in her job search. This site is a way for her to pay it forward, obtaining qualified materials from her friends and contributors, and building a similar community to pass the resources on to you.

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