Darren Wray, Finance Sector Manager Madison Investment Fund 2/26/07 Finance Interviews Darren Wray, Finance Sector Manager Madison Investment Fund 2/26/07

Agenda I. Basic Interview Tips -Ground rules for all Finance interviews II. Areas of Interest -Investment Banking, Sales & Trading, Research, Structured Finance, The “Buy Side” III. Investment Banking Recruiting Profile and Interview FAQ -Typical path of entry into I-banking as a JMU student -What to expect in an investment banking interview IV. Sales & Trading Recruiting Profile and Interview FAQ -Why Salespeople/Traders are inherently better thanbankers

Agenda (Cont.) V. Research Profile and Interview FAQ -Highlight the different opportunities in research -Illustrate common pitfalls in research interviews VI. Structured Finance and Buy Side Profiles/FAQ -What is Structured Finance? -Brief overview of Buy Side interviews VII. Conclusion -List of resources for interview prep -Closing Remarks

Basic Interview Tips Dress professionally, keep it conservative Know every line of your resume Interpersonal/communication skills Accomplishments: Must be measurable Be able to tell “your story” in 30 seconds or less Build a rapport with the interviewer Thank you notes Have intelligent and relevant questions prepared

Investment Banking Interviews Investment Banking Business Segments -Corporate Finance: FIG, TMT, Energy etc.. -Mergers & Acquisitions Typical Path of Entry for JMU Students -Very difficult industry to enter. Must be persistent. -Multiple phone interviews followed by “super day” Expect to do most of the work independently -JMU has no formal recruiting arrangements with any bank

Investment Banking FAQ Why I-Banking? What is I-banking? Why do you want to work for this bank? Various “fit questions” Are you prepared to effectively sacrifice your social life by working 100+ hour weeks? How do you value a company? Tell me about a recent deal we completed Explain how the three financial statements fit together What is your biggest weakness? Long stock recommendations Brainteasers Where else are you applying/interviewing? Computer Skills

Attitude “We don't hold it against people who have advanced degrees, like MBAs, but we do prefer people with PSDs: poor, smart, and a deep desire to become rich.” - Ace Greenberg JMU is not a target school

Sales & Trading Interviews -Often the most profitable area of an I-bank -Traders buy and sell financial products with the goal of making an incremental amount of money on each trade. -The sales force primary job is to call on institutional investors to suggest trading ideas and take orders. Personality Conflicts between Salespeople and Traders Path of entry almost identical to Investment Banking Interviews focus on your ability to work under pressure

Sales & Trading FAQ Expect Rapid Fire Questions from Volatile Traders Long & Short Stock Recommendations Impact on Markets Following Economic Data Release What is the square root of .1? Why should I hire you as a trader/sales person? What would you do for a career if Wall St. didn’t exist? Where are the major market indices now, and what have they done over the past 3, 6, 12 - month periods? What financial publications do you read?

Research Interviews Equity Research -Division which reviews companies and writes reports about their prospects, often with "buy" or "sell" ratings. -Sell side research aids the firm’s traders and sales force as well as its institutional clients -Buy side research is typically less formal Fixed Income Research -Ratings companies such as S&P, Moody’s, and Fitch evaluate corporate and sovereign debt instruments

Research Interviews FAQ Despite popular belief, research analysts are not hermits that enjoy going over 10-Ks in the dark by themselves. Long stock recommendation…Very important How do you value a company? Explain how the three financial statements fit together What financial publications do you read? Do you stray away or look forward to client contact? How has GDP trended over the past year? What does the inverted yield curve mean for our companies? Writing skills are VERY important on the sell side.

Structured Finance The securitization of an asset with a steady stream of cash flows. Ex. Mortgage Backed Securities (MBS) and Collateralized Debt Obligations (CDO) Big four accounting firms all have established structured finance groups which recruit actively at JMU Interviews tend to be more personality fit based. Computer skills, especially Excel, are highly valued. Math skills may be tested.

The Buy Side Institutions such as mutual funds, pension funds and hedge funds that buy large portions of securities for capital-management purposes. Private equity firms can also be included in this definition. Very limited opportunities for JMU students. Buy side interviews will be very similar to sell side. Private Equity interview = Ibanking interview on roids. Hedge Fund Research = Sell Side Research – Writing.

Preparation Vault Guide to Finance Interviews -THIS IS NEEDED Become familiar with Wall Street pop culture. Books: Monkey Business, Liar’s Poker, When Genius Failed, and The Bonfire of the Vanities Movies: Wall Street, Boiler Room, American Psycho As MIF analysts you should already be reading WSJ daily. Start reading more obscure/industry specific publications. Practice with friends, fellow analysts, and your manager.

Questions & Comments?