What Math Do You Need to Know in Investment Banking?

Investment banking involves a range of mathematical concepts and techniques, including:

Financial modeling: Investment bankers use financial modeling to analyze and understand financial data. This typically involves building complex Excel models to forecast financial statements and perform sensitivity analysis.

Statistics: Investment bankers use statistical techniques to analyze data and make informed decisions. This may include working with probability distributions, hypothesis testing, and regression analysis.

Calculus: Investment bankers may use calculus to analyze financial data and perform complex calculations, such as valuing derivatives or determining the optimal capital structure for a company.

Linear algebra: Investment bankers may use linear algebra to perform matrix operations and solve systems of linear equations, which can be useful in financial modeling and other areas.

Basic arithmetic: Investment bankers should have strong skills in basic arithmetic, including addition, subtraction, multiplication, and division.

By developing a strong foundation in these mathematical concepts and techniques, you can better prepare for a career in investment banking.