What to do when you don't know the answer to a technical question

Why does bluffing hurt more than not knowing?

An analyst who guesses with confidence and is wrong puts a bad number in front of a client. That is the single thing bankers fear most from a junior, and a bluff in an interview tells them you might do it. A student who says "I am not sure, but here is how I would think about it" shows the opposite habit.

Interviewers also know the material far better than you. They will spot a made up answer, and the follow up questions will expose it. Once you are caught bluffing once, everything else you say is discounted.

What should you do, step by step?

Use the same five steps every time so you do not freeze. The first two buy you time without looking stalled, and the last three turn a blank into a visible line of reasoning the interviewer can follow and grade.

1. Pause for two or three seconds. Silence feels long to you and normal to them.
2. Restate the question in your own words, which confirms you heard it right and starts your thinking out loud.
3. Say what you do know that is related: the definition, the statement it touches, the direction things should move.
4. State an assumption if you need one (a tax rate, that the item is tax deductible) and reason step by step to an answer.
5. Finish clearly: give your answer, say how confident you are, and if you could not get there, say how you would check it.

What does reasoning out loud sound like on a real question?

Suppose you are asked how a $100 inventory write down flows through the statements, and you have never practiced it. You do know depreciation, which is also a non cash expense, so you can build from that. Here is the answer out loud, assuming a 25 percent tax rate and that the write down is tax deductible.

"I have not done this one before, so let me reason it through. A write down is like depreciation: an expense that reduces income but does not use cash. Assuming a 25 percent tax rate and that it is deductible, on the income statement pre tax income falls by 100, taxes fall by 25, so net income is down 75. On the cash flow statement, net income is down 75 but I add back the 100 because it was non cash, so cash is up 25. On the balance sheet, inventory falls by 100 and cash rises by 25, so assets are down 75, and retained earnings fall by 75 so equity is down 75. It balances."

• Income statement: pre tax income down 100, taxes down 25, net income down 75.
• Cash flow statement: net income down 75, add back 100 non cash, cash up 25.
• Balance sheet: inventory down 100, cash up 25, assets down 75; equity down 75. Balanced.

What if you cannot reason your way there?

Sometimes the question is about something you simply have not learned, such as a specific accounting rule or a niche product. Then say so in one sentence and offer what you do know nearby. "I have not studied how deferred tax liabilities are created in detail. I know they come from a difference between book and tax accounting, and I would look at the tax footnote to see what drives it."

Then move on without apologizing again. One clean admission costs little. Five minutes of visible distress costs a lot. If the interviewer gives you a hint, take it and keep going; being coachable in the moment is exactly what they want to see.

• Say "I am not sure" once, not repeatedly.
• Offer the nearest thing you do know and how you would find the rest.
• Accept hints gratefully and use them out loud.
• If you realize later in the interview that you were wrong, correct it briefly. That reads well.
• Look the answer up that evening and drill it, so it never happens twice.

How do you reduce the number of questions you cannot answer?

The best defense is breadth on the core topics, because most undergraduate technicals are variations on the same few ideas: how the statements link, enterprise versus equity value, how a DCF works, and the basics of M&A and LBOs. Drill them until you can explain the why, not just the answer, and you can reason through almost any variation.

The live technical questions below are a good place to find your gaps. Any you cannot answer cleanly the first time are the ones to drill this week.

Questions students ask

Will one wrong technical answer sink my interview?

Usually not, especially if you handled it well. Interviewers look at the whole conversation. A pattern of missed basics hurts; one miss on a harder question, handled calmly, often does not.

Is it fine to ask for a moment to think?

Yes. "Let me think about that for a second" is normal. Just keep it to a few seconds and then start reasoning out loud.

Can I ask a clarifying question?

Yes, and it often helps. Asking whether to assume a tax rate, or whether a charge is tax deductible, shows you know which details matter.

What if I realize I was wrong after the interview?

Do not email a correction for a single question. Learn it and move on. If it came up in a later round with the same firm, you can mention you looked it up.

Should I guess on a numerical question?

Estimate rather than guess. Give a reasoned rough number and say how you got it. An estimate with logic is useful; a number with no reasoning is a bluff.