Hey guys,
I just had to take a 60-minute, 67-question Assessment exam for GS. A bunch of the stuff I had never even seen before in any of my classes (I'm not much of a slacker - I have a 4.0 finance & economics double major, 3.87 overall, and won a scholarship as well) so some of the questions I was forced to just guess. Some of the questions were just downright hard.
The topics covered were: Equities Introduction, Analysis of the Balance Sheet, Derivatives Overview, Duration & Convexity, Bonds - Primary & Secondary Markets, Securitization Introduction, Trade Processing Introduction, Analysis of the Income Statement, Financial Markets Introduction, Equities Issuing, Accounting Introduction, Bond Prices & Yields, Time Value of Money, Bonds Introduction, Foreign Exchange Market Overview, Understanding Financial Reports, NPV & IRR, Interest Calculations, Money Markets Introduction, Analysis of the Cash Flow Statement.
I ended up scoring 50 right out of 95. The test was broken up into the above 20 subject areas. If you get 70% or more on any of the subjects you pass it, but if you get less than you have to take an online course provided by them and take another exam and pass it before starting actual training it July.
I ended up "passing" 7 of the 20 sections (scored 70% & higher). Some of the subjects had only 3 questions so getting 2 out of 3 didn't quite cut it so it's very frustrating.
It says on the site that all course grades will be shared with senior management, but it also says that you should not study beforehand.
Should I be worried about my not so stellar grade on the assessment? Won't they teach us all we need to know at the official training? Has any of you taken an exam like this prior to actual training?
Much thanks.
I never knew GS makes you take a pre analyst assessment exam, that's definitely strange.
The BB I'm going to be working at this summer has mentioned nothing about me taking a test like that and I highly doubt I will have to.
I think you are fine. They hired you as a person for a specific reason and aren't about to let you go, because of some computer test. You are definitely fine in my opinion and shouldn't worrry.
They are prob. just trying to see where you match up with your peers....don't worry about it.
I don't any "senior management" that are going to give a shit about an interns pre-internship assessment. Seriously, don't worry about it. They're just trying to match you up against your peers, and they'll likely give you further reading based on the sections you didn't do well. It's simply to get you geared up and prepared for the internship. Given the fact that SAs pretty much learn everything on the job, I don't know why they make kids take these tests. My only guess would be to get everyone some level of basic understanding, esp for the eng and history majors.
Given that you're already hired, there's no need to worry about it. It won't determine your bonus or any other aspect of your future at the firm.
No "senior management" will spend even a second thinking about your results or how you fared vs. other people. They MIGHT use this to see how well-prepared your class is or what you need further work on, but really it's all pointless until you start... it's just a summer internship, they don't expect you to know everything (anything).
Or it could just be a scare tactic... just don't let it work on you.
I'm actually going to be a full-time analyst so this isn't for a summer internship.
They say not to study for the exam because it helps them personalize the pre-training learning courses to what you need improvement on, so I suppose it could be merely to make sure everyone comes in on day 1 of orientation w/ the same knowledge base.
Given the current market, it's just a little bit frightening/intimidating to think that senior management may see these grades and think them as indicative of my potential and skill.
Still seems not super-important to me. You can study if you want but I wouldn't worry too much about it.
I agree that the current market makes it scary, but better to be focused on on-the-job performance initially and making a good impression vs. worrying about this beforehand.
Pre-hire Analyst Test (Originally Posted: 02/09/2014)
Anyone have experience in taking a pre-hire analyst test/exam in one of the top tier capital markets firms/groups focusing on Investment Sales, Debt and Equity placement? I have one scheduled this week and would appreciate any feedback.
What is your experience in RE thus far? If you are fresh out of college then I doubt they will get too technical. If you are switching from another role within the industry, then their expectations of your abilities will likely be much higher.
I would know how to build a rent roll from a stack of leases, know what a pro-forma cash flow statement looks like and how it flows, know how to model debt/equity structures (maybe not a full waterfall scenario blindfolded but atleast know what it is and how it works), debt terms (Loan term, amortization table, coupon, debt yield, service coverage, etc.).Learning as much as you can about the asset type the team works on and the market (vacancy, rental rates, etc.), that sort of thing may be good as well.
Good luck in the interview.
Also, and this may sounds kind of dumb, but if you havent used on in a while- brush up on your skills using a financial calculator. If you havent used on in a while, and your interviewer asks you to model out an IRR scenario or amortization table on paper and you will shit bricks if you cant remember what you are doing.
Especially on a HP 12C, all these old assholes use it instead of a BA2+ and its completly ass backwards.
Amen to that.
probably how to calc unlev and lev irr given property/debt assumptions. also how to calculate debt terms mentioned in Lloyd Braun's post
Practically every interview i went though had these (including my current job). My current job just had me do a draw schedule and a simple operating statement. A few shops had me go through an Argus run.
One PE fund was nasty and made me do a full model for a resi/retail development with a unit-by-unit rent roll, land loan (with current pay/accrual) functions that was taken out by a construction loan, and a waterfall. This was an exception though and I was shooting for something above my exp level. How much time are they giving you to do the test?
Lloyd Braun's advice is good, i would focus on that if you're just coming out of school.
Spammer,
How much time did they give you on the construction model?
24 hours
Hey guys, apologize for the late follow up. All of your feedback was extremely valuable (and I appreciated the 12C reference - I hate it too). Just wanted to give a recap in case this subject comes up in a search for someone else in my position. Crazy Lloyd - I have a few years of experience under my belt at a smaller firm but working on institutional level transactions (added in the event that the test was based on my perceived level of experience).
Ultimately, the test was exactly as all of the above posters said it would be, run through a simple 10 year cash flow with a given pro-forma and a set of macro level assumptions (revenue/expense inflation etc.), was asked to calculate purchase price, exit value (both at given cap rates) and then solve for levered IRR.
Thanks again for the feedback everyone, I was told by the proctor that I did extremely well and am continuing on with their interview process. Thanks again.
A couple of questions:
I can only speak to your second question but I was provided a pro-forma, simple macro factors (expense and revenue inflation), asking cap rate, terminal cap rate, hold period and the terms of the proposed debt.
I simply had to calculate purchase price and corresponding equity requirement, run an 11 year cash flow with the inflation factors (literally as easy as it sounds - just drag across in Excel) and then calculate exit value based on terminal cap rate and which year the buyers were pricing off of. Then was asked to calculate IRR. There were some qualitative questions asked about potential risk factors, questions related to the pro-forma and debt ratios.
Thanks jlk, that's really helpful. Seems pretty simple, by "asking cap rate" do you mean the cap rate they bought the property at? So, in place NOI (the "pro forma" you mentioned) / "asking cap" = purchase price?
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