Why Morgan Stanley Interview Questions

Sample answer:

“Thank you for asking. I am excited about the prospect of working for Morgan Stanley for a few reasons.

First and foremost, Morgan Stanley is a leader in the discipline and is widely recognized for supplying its customers with cutting-edge answers. I'm drawn to the chance to collaborate with industry leaders and support the growth of the business.

It's also crucial to me that Morgan Stanley is committed to diversity, equity, and inclusion. I admire the business's dedication to providing a friendly and inclusive atmosphere for all of its workers.

Finally, I am impressed by the business' emphasis on philanthropy and corporate social responsibility. I also appreciate the opportunity to work for a company that supports my conviction in contributing back to society.

Overall, I think Morgan Stanley is the ideal environment for me to advance and refine my professional abilities. I appreciate your taking a look at my application.”

Sample answer: 

“My early interest in Morgan Stanley was sparked by its standing as a premier investment bank with a sizable worldwide footprint.

 As I did more research on the company, I became particularly intrigued by its emphasis on innovation and dedication to utilizing technology to advance the company.

Morgan Stanley's dedication to inclusion and diversity, as well as its emphasis on establishing a collaborative and supportive work environment, really inspired me. As someone who values teamwork and continuous learning, I believe that Morgan Stanley would be an ideal fit for me.

In the end, I feel that Morgan Stanley's values and goals align with my own, and I am excited about the prospect of joining such a dynamic and forward-thinking organization.”

Sample answer:

“What sets Morgan Stanley apart for me is its records of excellence and innovation within the financial enterprise.

The company has an extended-standing popularity as a frontrunner in investment banking, wealth management, and trading and is known for its expertise in complicated financial transactions.

However, what surely stands out to me is Morgan Stanley's commitment to innovation and its use of technology to force the commercial enterprise ahead.

The organization has been at the center of developing new technologies to enhance the effectiveness and precision of financial transactions. I am thrilled about the opportunity to work with and study at such a progressive institution.

Moreover, Morgan Stanley's dedication to diversity and inclusion is a major factor for me.

The firm has made enormous strides in growing an inclusive work environment that values the range of thought, and I believe that this tradition will not only benefit me as a worker but may even allow me to make significant contributions to the firm and its clients.

In the end, Morgan Stanley's worldwide reach and great network of customers make it an interesting place to work, with opportunities to collaborate with people from diverse backgrounds and cultures.

To be honest, I feel that Morgan Stanley's combination of excellence, innovation, and commitment to variety and inclusion make it a standout choice for me in the financial industry.”

Sample answer:

“My choice to seek a job at Morgan Stanley was significantly influenced by the study I did on the company. I was thrilled by the organization's dedication to innovation, variety, and cooperation as I learned more about its history, lifestyle, and ideas.

Through my studies, I found out about Morgan Stanley's emphasis on fostering a numerous and inclusive workplace that encourages creativity and collaboration, in addition to its use of cutting-edge technology to increase the velocity and accuracy of monetary transactions.

These beliefs are quite similar to mine. Therefore, I know that working for an organization that upholds them would be satisfying and gratifying.

Additionally, I was drawn to Morgan Stanley's global reach and extensive network of clients, which provide unique opportunities to work on challenging and impactful projects that span the globe.

The organization drew me in because of its reputation as a leader in investment banking, wealth management, and trading. I'm eager to learn from some of the industry's brightest minds.

Overall, my investigation into Morgan Stanley has persuaded me that the company is a good fit for me in terms of its principles and opportunities for professional and personal advancement.

The idea of making a contribution to an organization that is so active and forward-thinking excites me.”

"Walk me through your resume" is a common interview question that allows the interviewer to better understand your work experience, abilities, and training.

Essentially, they may ask you to offer a summary of your resume, highlighting your maximum relevant experiences and accomplishments.

When answering this question, offering a clear and concise review of your resume is important, focusing on the experiences and talents most relevant to the position you're interviewing for.

You must spotlight your latest work experience first, then pass it on to other relevant experiences, including internships, volunteer work, or extracurricular activities.

Make sure to focus on the accomplishments and talents you advanced in each position instead of simply listing your process responsibilities.

This could assist in displaying your value as a candidate and how your past experiences can build up a better reputation for the position you're interviewing for.

Finally, be prepared to reply to observe-up questions on precise stories or abilities you noted in your resume review. The interviewer may additionally ask you to elaborate on a particular challenge or accomplishment, so you must offer specific examples and details.

Overall, "Walk me through your resume" is an opportunity to show off your qualifications and reports and display how you may bring value to the position you are interviewing for.

Here are some tips that you could use as reference:

• Be clear and confident 
• Showcase your communication skills through these types of questions
• Highlight your skills
• Be logical about everything you say
• Tell them about your past experiences and achievements 
• Your experience and achievements should align with the position you are going for

This question might be one of the most unexpected interview questions you will get asked. It is obvious that they are tricky ones to answer.

Crafting an articulate response to the unexpected interview question, "Tell me about a company you admire," demands scrupulous consideration and strategic preparation.

Follow these recommendations to create a well-rounded answer:

1. Conduct in-depth research on the organization: Before the interview, research the company and identify its distinctive attributes and strengths that captivate your admiration. Then, delve into the organization's ethics, values, culture, and recent developments pertaining to the job.
2. Emphasize compatibility: When selecting a company to discuss, consider one that aligns with your personal values, interests, and career aspirations. This approach will enable you to provide a candid and authentic response highlighting your fervor for the field and desire to work in a similar environment.
3. Provide specific examples: When speaking about the company, furnish concrete examples of why you admire them. Refrain from offering generic compliments and instead focus on outlining the organization's accomplishments, values, or initiatives that you find compelling.
4. Connect the response to the job position: After discussing the company, articulate how your admiration for the organization aligns with the position you are interviewing for. Clarify how your reverence for the company stimulates you to work diligently and contribute to the organization's success.

Here's a Sample answer:

"Without a doubt, I hold [Company X] in high esteem for its unswerving dedication to promoting sustainability and social responsibility.

Their impressive implementation of eco-friendly practices throughout their supply chain and substantial reductions in carbon emissions have significantly impacted environmental preservation.

Furthermore, their unwavering commitment to giving back to the community through various charitable endeavors is indeed an inspiration. As an individual passionate about environmental and social issues, this company's values and mission resonate profoundly with my own.

Working for an organization that prioritizes sustainability and social responsibility would be immensely fulfilling and motivating for me, and [Company X] exemplifies a corporation that positively impacts both the business world and society at large.

Well, till now, it is one of the most common questions asked by every interviewer to evaluate a candidate's strengths and weaknesses.

When answering the interview question "Tell me about yourself," it's essential to briefly summarize your past experiences and achievements. It is important to focus on your skills and the things in which your strengths lie.

Here are some tips you can refer to

1. Keep it professional:  While it's okay to mention personal interests or hobbies briefly, your answer should primarily focus on your professional experience and qualifications. Avoid going into too much detail about your personal life or unrelated experiences.
2. Be concise: Keep your answer brief and focused, ideally no more than 2-3 minutes long. Use this time to provide a high-level overview of your relevant experience and skills.
3. Highlight your strengths: Use this opportunity to highlight your key strengths and accomplishments. Focus on experiences that demonstrate your qualifications for the job and align with the company's needs and values.
4. Connect it to the position: After discussing your background and accomplishments, tie it back to the job you're interviewing for. Explain to them how your past experiences and achievements can make you a good fit for the position you are applying for.

Example answer:

"I have several years of experience in [industry/field] and have developed a strong skill set in [relevant skills]. In my most recent role at [Company X], I was responsible for [key responsibilities], where I was able to achieve [specific accomplishment].

I believe that my experience in [specific skill or expertise] would be particularly valuable for this role at [Company Y]. I'm excited about the opportunity to [the specific way you can contribute to the company] and contribute to the company's success in this position."

In response to questions like this, it is imperative to manifest your critical thinking capabilities, meticulousness, and aptitude to make rational conclusions based on information.

Below are some suggestions on how to approach this question:

1. Provide context: Start by presenting an overview of the situations surrounding the scenario, including the company you had been affiliated with, the form of investment you were evaluating, and any relevant financial facts or information you tested.
2. Elaborate on your method: Thoroughly explain the steps you took to analyze the financial data, such as identifying significant patterns, conducting a SWOT analysis, or utilizing financial ratios to evaluate the company's performance. Elucidate the tools and techniques you employed and how you arrived at your investment recommendation.
3. Examine the results: Reveal the results of your analysis, including any risks or challenges you encountered and how you ultimately came to your investment proposal. If feasible, provide specific examples of how your recommendation positively impacted the organization or investors.
4. Highlight your abilities: Take this opportunity to accentuate your critical thinking capabilities, meticulousness, and aptitude to make rational conclusions based on information.

Sample answer:

“In my previous job at [Company X], I was assigned to scrutinize the financial data of a company in the technology industry to make an investment recommendation.

My methodology for analyzing the data encompassed conducting a SWOT analysis, using financial ratios to evaluate the company's performance, and examining market trends and competition.

I also scrutinized the company's management team, past performance, and future growth potential.

After completing a complete analysis, I recognized a few extensive risks and challenges, including the employer's high debt-to-equity ratio and multiplied competition in the marketplace.

Nevertheless, I also recognized the potential for growth in the company's innovative technology and strong management team. Based on my analysis, I recommended that our firm invests in the company.

The investment yielded a positive outcome, with the company's stock price soaring by over 20% in the initial quarter following our investment.

I believe that my robust critical thinking capabilities and meticulousness were instrumental in identifying the potential for growth in the company and making a successful investment recommendation.”

Here a call option refers to the holder or investor who does have the right but not the obligation to purchase the underlying security of stock at the strike price on or before the expiration date of the trade.

And when the price of the underlying security of that particular stock rises, a call options value gets spiked.

On the other hand, a put option gives a holder or investor a choice or sell the underlying security of the stock at the target price on or before the expiration date of the trade.

Also, when the price of the underlying security of the stock falls, the value of a put option rises as it is in a short position.

Some tips are:

1. Define key terms: Make sure you define key terms such as call option, put option, and underlying asset in your answer.
2. Use examples: Provide examples to illustrate your answers, such as a call option on a stock or a put option on a commodity.
3. Discuss benefits and risks: Explain the benefits and risks associated with the call and put options, including potential gains and losses.
4. Demonstrate your knowledge: Use this opportunity to showcase your knowledge of financial derivatives and investment strategies.
5. Practice: Practice answering this question ahead of time to feel more comfortable and confident during the interview.

Sample answer:

"A call option is a financial contract that gives a buyer the right to buy an underlying asset but not the obligation for the given period of time frame.

And on the opposite side, a put option gives a holder the right to sell or short an underlying asset but not the obligation for the given period of time frame.

Assume for the moment that you paid $50 for a call option on an underlying asset. Additionally, you can sell the call option and purchase the stock of that particular underlying commodity at the lower strike price while still profiting if the price of that stock rises above $50 within the predetermined time period.

On the other hand, you cannot sell the underlying asset and allow it to terminate if the underlying asset's market price of the underlying asset does not increase during that period.

As simple as a call option, the put option is a financial instrument where the holder has the right to choose and sell the underlying security of the stock.

The underlying security of a stock already has a target price on which, if the price falls to the target price, the price of a put option increases.

Assume that you bought a put option of a stock underlying security at the strike price of $100, and the market falls below $100 within the given time frame.

You can book profit from that position, or you can hold it till the expiry date of the risk is up to the holder if he wants to book profit or keep it for a more significant profit or loss.

In summary, call-and-put options are financial contracts where they have the right to buy and sell the stocks of an underlying asset for a predetermined time frame. These derivatives offer the potential for significant gains but also carry risks.

Careful analysis and timing are necessary to make informed investment decisions."

Equity and fixed income are two important asset classes in the corporate finance world. Therefore, any applicant seeking a job in finance, but particularly those seeking a career in the investment banking industry, must understand the distinction between equity and fixed.

Equity, in essence, denotes ownership in a firm and is commonly manifested as common stock. By procuring a share of stock, you acquire a minuscule segment of the firm's ownership.

The value of your ownership stake varies proportionally to the company's performance and market demand for the stock.

After equity investments in a particular company, you are considered the company's owner among the group of equity investors. Therefore, you have the right to take a portion of companies' profit and the advantage of presenting your opinion and voting right on the company's important decisions.

On the other hand, fixed income refers to debt securities like bonds. By acquiring a bond, you are lending money to the bond issuer in exchange for steady interest payments and the return on your principal investment when the bond matures.

Bonds commonly have a fixed rate of return and are generally considered less precarious than equity investments.

You must clearly define equity and fixed income to respond to this query effectively. You must commence your response with a clear and concise definition of both asset classes.

Here are some tips for reference:

1. Use examples to illustrate the differences. 

Using examples to illustrate the differences between equity and fixed income is also necessary.

By providing examples of reputable companies or widespread stocks representing equity investments, followed by examples of bonds or other debt securities representing fixed-income investments, you can better elucidate the contrast between the two, making them more concrete and easier to comprehend.

2. Emphasize the risks and benefits of each asset class. 

It is also crucial to underscore the risks and benefits of each asset class. It is essential to discuss the pros and cons of the equity investment, such as the company's instability, market trends, and any hazardous environment surrounding the company.

Similarly, discuss the pros of fixed income investments, such as regular interest payments and lesser risk, as well as the potential downsides, such as lower returns.

3. Connect your answer to the job position. 

Linking your response to the position you are being interviewed for is also highly recommended.

If you are applying for a role in investment banking, for example, you could elaborate on how recognizing the differences between equity and fixed income is critical for rendering investment suggestions to clients.

Overall, confidence and clarity are imperative to your response. In addition, demonstrating a comprehensive understanding of equity and fixed income will impress your interviewer and exhibit your knowledge and expertise, essential components for a flourishing career in finance.

You can check out our Financial Statement Modeling Course for a better understanding.

Generally, this is the most basic technical question till now, which every investment banking firm asks.

The three most fundamental statements of a company, as obvious, are the Balance sheet, Cash Flow, and Income statement. The balance sheet is also known as a statement of the company's position. The income statement is also known as a comprehensive income statement.

Here is a detailed explanation of each statement:

1. The Balance Sheet 

As its name represents, a balance sheet of a company shows us the balance between assets and liabilities. Assets represent the company's resources, such as cash, inventory, or property.

Liabilities signify the company's obligations, such as loans or accounts payable. Equity indicates the residual interest in the assets after deducting liabilities. This is why the balance is an essential part of analyzing a company's liquidity and capital structure.

2. Cash Flow Statement 

The cash flow statement shows the cash a company has generated and how it's been used over a specified period. It separates cash inflows and outflows into three categories: operating activities, investing activities, and financing activities.

The former includes cash received or paid for the company's core business operations. The latter includes cash used for investments in assets like property or equipment or cash received from selling assets.

Financing activities include cash raised from issuing debt or equity and used to pay dividends or buy back shares. And using these methods, they run a company's cash flow smoothly.

The cash flow statement assesses the company's liquidity and cash generation capacity.

3. The Income Statement

The income statement shows a company's revenue and expenses over a point in time. It starts with revenue and deducts the cost of goods sold (COGS) to get the gross profit, followed by the operating expenses to arrive at the operating profit.

Interest and taxes are subtracted from this amount to determine the net income. As such, the income statement assesses the company's profitability.

Sample answer:

"In my prior job role as a <your previous position>, I frequently deployed the balance sheet, cash flow statement, and income statement to evaluate a company's monetary fitness.

The balance sheet proved particularly instructive in expounding a company's liquidity and solvency, as it afforded me an instantaneous overview of its assets, liabilities, and equity at a given point in time.

By comparing the company's current assets to its current liabilities, I was enabled to ascertain whether it had sufficient cash on hand to fulfill its short-term obligations.

Furthermore, the cash flow statement proved equally pivotal in my analysis, as it divulged the extent to which a company had generated cash and how it expended it.

In my review of the statement, I typically examined the operating activities section to appraise whether the company was generating enough cash to finance its day-to-day operations.

Lastly, the income statement proved consequential in assessing a company's profitability. I commenced by perusing the company's revenue and subtracting the cost of goods sold to compute gross profit.

From there, I surveyed the operating expenses to derive operating profit. Then, by subtracting interest and taxes, I computed net income.

Altogether, utilizing these three financial statements enabled me to understand a company's financial fitness comprehensively.

By assessing each statement individually and then amalgamating them, I was empowered to glean a holistic picture of a company's liquidity, solvency, cash flow, and profitability."

DCF stands for discounted cash flow. DCF helps us to evaluate a company's intrinsic value by analyzing its future cash flow system and discounting them back to its present value.

Future cash flow uses assumptions on the companies company's future performance, including revenue growth, profit margins, and capital expenditures.

Here are some tips for reference to understand Discounted cash flow in deep.

1. Gather data 

Collecting as much pertinent information as possible regarding the business being analyzed is vital. It requires delving into the company's financial statements and its future projects.

Also, keep an eye on the market trends of a company and any other essential objects that may impact its future cash flow.

2. Discuss the company's data.

After acquiring all the data, it is crucial to make conservative assumptions about the company's future performance. By discussing the company's data, we can consider others' opinions of its future cash flow and understand the hidden risks.

3. Pay close attention to the discounted rates.

Another crucial tip is to pay close attention to the discount rate used in the analysis. Discounted rates reflect the company's risk profile.

Discounted rates are based on the company's weighted average cost of capital(WACC), which evaluates the company's cost of debt and equity.

The analysis can accurately reflect the business's actual value by carefully selecting an appropriate discount rate.

4. Stay up to date.

It's essential to be adaptable and flexible in the analysis. The financial world is continually changing, and today's assumptions may require revision tomorrow.

By staying up-to-date on industry trends and being open to adjusting the analysis as needed, investors can provide accurate and valuable insights.

Sample answer:

“In my experience, taking a comprehensive, methodical approach to DCF analysis can help investors make informed decisions about buying or selling a company's stock.

By meticulously analyzing a company's financial data and making realistic assumptions about its prospects, investors can gain a more profound comprehension of a company's genuine value.

When conducting DCF analysis, the initial step I take is collecting all pertinent financial data about the business, such as historical financial statements, future projections, and any other relevant data points, such as market trends or industry outlooks.

Afterward, I assume the company's future cash flows, including revenue growth rates, margins, and capital expenditures.

After setting up all the data and assumptions, I calculate the business's free cash flow by deducting capital expenditures and changes in working capital from its operating cash flow.

I then discount these future cash flows to their present value using a discount rate reflecting the company's risk profile.

It's significant to observe that an essential aspect of the analysis is the discount rate that was used. I typically use a weighted average cost of capital (WACC) that considers the capital structure, cost of debt, and cost of the business's stock.

The WACC reflects the minimum rate of return that investors would require to invest in the company, and it helps me determine whether the company is undervalued or overvalued.

Once all these calculations are done, I arrive at a present value of the business's future cash flows. Then, to determine whether the stock is cheap or overpriced, I compare this present value to the company's current market value, which is basically the projection of future profit.”

If you want to know more about DCF in practical use, you can check out DCF Modeling Course.