Preface... 1 About 7city... 3 Introduction Navigating the Maze... 11

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1 Contents Preface... 1 About 7city... 3 Introduction Navigating the Maze Section 1: Your Application Your Application Introduction What is banking? What do these divisions do? Interactions between IBD and markets What to expect as an Analyst within a bank What makes a complete Analyst? Preparing to apply Preparing for the recruitment process Research the financial services industry Attend recruitment events Build up your CV Decide what kind of role is right for you Writing your CV or application The cover letter/motivational section The first round interview The day of the interview During the interview Answering behavioural/competency-based questions The STAR interviewing technique So what s your biggest weakness? Menuing Section 2: Your Interview Your interview Introduction Providing colour to your response Read the financial press Read the research Investment banking blogs Accounting and Financial Analysis Q&A Introduction What are the key components of a set of financial statements? What is meant by financial statement integration?...67 Why do accounts show depreciation and amortisation? How can D&A numbers be manipulated? How does impact the financials? How does depreciation affect the financial statements? How does an impairment write-down affect the financial statements? How does the purchase of an asset affect the financial statements? What is the impact on the accounts of a company entering into a new lease of an asset? How does a provision affect the financial statements? What is working capital? What is net debt and how is it used? Does net debt capture all of a company s debt? Why is net debt net? What does equity on the balance represent? What is a minority interest? What is the NOSH? What is EBIT?

2 What is EBITDA? How and why would you normalise a metric? What are pro-forma numbers? What does LTM mean? What is EPS and how is it used? What is the difference between basic and diluted EPS? What is equity dilution? What is the treasury method? Why is the cash flow statement so important? How do you move from EBIT to operating cash flow? Why does profit not equate to cash flow? How would you analyse a cash flow statement in five minutes? What could a company do if it had excess cash on its balance sheet? What type of pension schemes do companies have? Why are they sometimes problematic? What is deferred tax? Valuation Q&A Introduction Why is valuation important? What are traditional valuation methodologies? Valuation isn t just about theories and models what else should an Analyst consider when valuing a company? What is the difference between buy and sell-side M&A? Which valuation techniques are likely to give the highest valuations? What is a valuation football field? What is market capitalisation and how do you calculate it? What is enterprise value? Walk me through a discounted cash flow What is free cash flow to firm? What is beta? Why and how would you de-lever a beta? Walk me through a comparable company valuation What are the pros and cons of EV vs. Equity multiples? What are the pros and cons of using the EV/EBITDA multiple? What drives an EV multiple? Why would multiples of a company trade at a premium or discount to its peers? What is a control premium? What does a merger model do? What factors can make a deal EPS accretive? What are the pros and cons of equity and debt as transaction finance? Who does what on a deal? How can a company defend itself from a takeover? What is a company profile? What is a pitch book? Statistical and Financial Math Q&A Introduction What are the common measures of central tendency and dispersion? What is standard deviation? What is a geometric mean? What is correlation coefficient? What is the difference between simple and compound interest? What is discounting? What is an annuity? What is a perpetuity? How is discounting used? What is net present value? What is the internal rate of return (IRR)? Equities Q&A Introduction What are the basic characteristics of common stock or ordinary shares? What is an ADR?

3 Why would a corporation choose to raise finance via an equity issue as opposed to a debt issue? What are the advantages and disadvantages of being a publicly listed corporation? What does ex-div mean? What is the difference between primary and secondary markets? How can new equity be issued? What is stabilisation? What is book-building? What is underwriting? What are the key stages in an IPO process? What is a dual track process? What is a syndicate? What is a prospectus? What is a pilot fishing exercise? What is a Greenshoe option? What is a secondary offering? What are the full advantages and disadvantages of a fully marketed book-built offering? What is an accelerated book-built offering (ABB) or a placing? What is a rights issue? What is TERP? What is an index? What aris the difference between a market capitalisation weighted index and an unweighted index?. 165 What is the Dow Jones Industrial Average (DJIA?) What is the Nasdaq? What is the S&P 500? What is the FTSE 100? Money Markets Q&A Introduction What are the money markets? What is the inter-bank market? How are inter-bank rates quoted? What is commercial paper? What is a certificate of deposit? Fixed Income Q&A Introduction Why would a corporate choose to raise finance via a debt issue as opposed to an equity issue? What are the two main types of debt finance and what are their key features? What is a bilateral loan/syndicated loan/club deal? What are the advantages and disadvantages of loan finance? What is a term loan? What is a revolving credit facility? What is the interest rate on a loan based on? What is LIBOR? What is EURIBOR? What is a covenant? Who are the main credit rating agencies? Why are credit ratings more important for bonds than loans? What is the lowest investment-grade rating? What is a bond? What are the key features of a vanilla bond? What are the advantages and disadvantages of bonds? What is a floating rate note? What is an index-linked bond? What is a callable bond? What is a putable bond? What is a convertible bond? What is a Eurobond? How would you determine the coupon on a bond? What is a high yield bond? What is PIK? What is the Yield to Maturity (YTM)?

4 What is the difference between a clean and dirty price? What is duration? What is a yield curve? What is an asset backed security? Derivatives Q&A Introduction What is the difference between cash and derivatives securities? What is the difference between OTC and exchange traded? What is a future? How are futures used in practice? What is basis? What is the difference between contango and backwardation? What is a forward contract? What is a futures contract? What is a long position on a future? What is a short position on a future? How does a future settle? How can a future be used to hedge? What is an option? What are the basic option positions? What drives the price of an option? What factors influence the time value of an option? What is an interest rate swap? What is a cross currency swap? What is an equity swap? What is a credit default swap? What is a structure product? What is arbitrage? Foreign Exchange Q&A Introduction How are foreign exchange rates expressed? What is a cross rate? What is foreign exchange quoted? What is a forward forex deal? How are forward rates quoted? How are forward exchange rates determined? What is the Fisher effect? Asset Management Q&A Introduction What is asset management? What is portfolio construction? What is the efficient market hypothesis? What is passive fund management? What is active fund management? How can portfolio performance be measured? What is risk? What is a risk premium? What is the difference between systematic and non-systematic risk? How can risk be measured? What is the Sharpe ratio? Section 3: Preparing for Work Preparing for Work Introduction Life as an Intern The Internship Training Joining your team Building confidence

5 Appendix 1: Bloomberg for Analysts Introduction Bloomberg skills coverage The Bloomberg keyboard Using Launchpad Exporting data from Bloomberg Finding a company ticker The equity screen Accessing shareholder data (holders) Getting NOSH via the description (DES) screen Accessing company filing data Finding company news (and research) for normalization purposes (corporate actions) Picking a relevant broker report (company research) What are the current Analyst recommendations (Analyst recs)? Getting share price data (graph price) Annotating Bloomberg share price graphs Creating a relative share price graph Importing Bloomberg share price data into Excel Gettting a Hoover s profile Accessing the related securities screen Accessing the issuer description screen Creating government (international) yield curves Creating yield curve analysis ( yield curve relative ) Credit profile summary Creating a Bloomberg beta profile Accessing the WACC profile Accessing the new issues monitor Accessing debt term sheets Creating debt maturity profiles Accessing money market rates Accessing forex rates Accessing world equity indices Accessing economic data Using the Bloomberg MA search functionality Creating league tables Bloomberg news codes Appendix 2: Excel shortcuts Appendix 3: FactSet Introduction FactSet application How to store a list of comparable companies on FactSet Research companies in depth Share price data Company filings Download multiple PDF TravelBooks Exporting data from FactSet Updating and maintaining custom template models, reports and presentations in Microsoft Excel, Word and PowerPoint Downloading Ready-made models Improve efficiency and productivity in everyday tasks Link Excel charts/tables to PowerPoint or Word Use ActiveGraph to create easy-to-update, Pitchbook-ready financial graphs using your firm s corporate colors, fonts and standards Index