Quick Question - Just finished sophmore year and interviewed
Hey all i just recently finished my sophomore year and interviewed with an alum at a small venture capital firm for a coop assignment. I have only taken corporate finance and financial accounting thus far and my interviewer asked me if i knew boot strapping for spot rates and forward rates. Was this a fair question? I know that For Ibanking you use DCF/Relative valuation models but is bootstrapping used in M&A or VC? Thanks for any help.
I can't comment on to what extent it may be used in VC, but if you've taken anything above basic finance courses, you should know it. Its not terribly complicated and you could probably find it on Investopedia. If your answer was no, why dont you research bootstrapping spot/fwd rates and drop him an email saying you researched it and some of its applications and was interested in the applications in which they use this? Shows initiative, and a willingness to learn. People wont be as apt to ask you "do you know x" since they'll figure, if you don't know it one day 1, you'll figure it out on your own without any hand holding.
Hey Marcus_Halberstram, thanks for your reply. I e-mailed him back with a pretty detailed description of bootstrapping and i got a positive response. I'll find out within two weeks fingers crossed thanks again. By the way i have only taken corporate finance and financial accounting.
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