When looking for an entry-level job in finance, one big hurdle to clear is the interview. Finance is fast-paced and stress-inducing. An interviewer may want to test whether you can handle the heat. Knowing how to respond to different questions can be a huge advantage.

"Where do you see yourself in five years?" and "What's your biggest weakness?" are obvious questions that arise in any job interview and have been covered in-depth elsewhere. In this article, we will focus on tips for answering the tough finance-specific questions that an entry-level job candidate can expect to face.

Be Prepared to Discuss Current Events in the Markets 

One challenge your interviewer faces is getting a read on which applicants have a true passion for the finance industry. Your resume is little help in this regard. An entry-level candidate isn't likely to possess a track record that demonstrates a commitment to finance. One way to gauge a candidate's level of passion is to ask questions about financial market conditions, big company news, current interest rates and so on.

The best way to be prepared is to regularly read financial news such as The Wall Street Journal and Financial Times, or watch daily markets coverage from CNBC, Bloomberg and Cheddar. An interviewer may ask what financial news you follow and ask you to discuss a recent news story that interests you.

Know what's topical in general financial news and specifically the area for which you are interviewing. Be prepared to discuss current interest rates on the benchmark treasuries, the federal funds target rate and what the Federal Reserve did at its last policy meeting, not to mention the current levels of the major stock market indexes, such as the Dow Jones Industrial Average.

Also, be prepared for the more theoretical questions that relate to your desired position. If you are interviewing for a job in fixed-income investing, an interviewer might ask you to explain the concepts behind duration, or how inflation will impact bond and stock prices. Make sure you know the major concepts and models in finance and that you can explain them coherently and intelligently.

Find the Answer to Brain Teasers by Simplifying the Terms

Another type of question posed by finance interviewers is the brain teaser. These questions may catch you off-guard, as they have nothing to do with finance. However, finance is an extremely analytical profession, and the brain teaser is a good test of analytical ability. There are many questions you could be asked, so don't study answers for brain teasers. Instead, learning how to approach them is the real key. Let's look at a couple of examples:

An interviewer might say:

"Look at the clock. If the time were 3:15, what would the angle be between the minute hand and the hour hand?"

The brain teaser needs to be considered carefully. Take your time. Don't feel you need to give an answer in one second. The first instinct of many is to answer "zero" because it seems that both the hour and minute hand would be on the three. This is incorrect. The hour hand moves one-quarter of the way from 3 to 4, as the minute hand moves one-quarter of the way around the clock from 12 to 3.

All it takes is a few simple calculations to arrive at the correct answer. There are 360 degrees on the face of the clock, and 12 numbers, so there are 30 degrees between any two numbers on the clock. Since the minute hand is on the three, the hour hand has moved 1/4 x 30 degrees away, which is 7.5 degrees.

Another possibility is a challenging math question. An interviewer could ask something like:

"What is 99 squared?"

A question like this may seem difficult, even using a pen and pad to work through. But if you get a question like this, try to put it in simpler terms. Trying to calculate 99 squared in your head is somewhat difficult and might take a while.

However, an easier way to calculate it is to alter the question a bit. 99 x 99 is the same as (100 x 99) – 99. 100 multiplied by 99 is 9,900; take away 99, and you arrive at the answer: 9,801. With this method, 99 squared becomes a question you can do in your head in a few seconds. You can apply a method like this to many math questions. Just think things through, and put the question in simpler terms.

For 'Guesstimate' Questions, Focus on the Method

Guesstimates are another style of question that interviewers ask to try to unnerve you and test your analytical abilities. These questions are complete oddballs. As with brain teasers, the possibilities for different types of questions are endless, so being able to approach them correctly is the main hurdle. Let's look at an example:

An interviewer could ask:

"How many refrigerators are in the United States?"

The key to questions like these is to understand you are not expected to give a correct answer, but instead display the way you analyze situations. And the worst answer you could give is to spit back "200 million" immediately as a complete guess, since these questions are testing how your mind works.

Start with the fact that there are roughly 300 million people in the United States. From there, make assumptions about the average size of a family and how many refrigerators an average family might have (maybe 1.5, since some families have more than one).

You may also want to assume the number of people living alone that will likely have just one fridge. Ask if the interviewer includes commercial refrigerators for businesses, and if so, incorporate this into your assumptions.

Use numbers that will be round and easy to calculate. The assumptions will be crude and inaccurate but will demonstrate you can take many factors into account when performing analysis.

Take your time. Write down your assumptions and calculations to come up with an answer. Remember: the answer is not nearly as important as the method you use to arrive at the answer. Being able to work through questions like these with a pen and pad while outlining your steps to the interviewer will be impressive and get you one step closer to the job.

The Bottom Line

Some interviewers may attempt to stress you out during the interview process, but try to go into the discussion calmly and with a clear head. Remember to prepare well, be up to date on financial news, and know the cornerstones of finance. Show off your analytical skills—a rapid-fire response probably will not cut it. Take time to consider your answers, and give the interviewer a chance to observe how you think. Highlighting your analytical skills and ability to think things through can help set you apart in the interview, which will improve your chances of getting the job.