PST Tips - Question Types PDF

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Client Interpretation Question 1. What is it? In every consulting project, communication with the clients’ top level (usually the Chairman or CEO) is always important. During my time with McKinsey, we usually hear an update every one or two weeks from our Project Director (usually a partner) on his meeting with the clients’ top level. Messages from those meetings are important on-going steers for the project. No surprise it makes up an entire question category in the Problem Solving Test. Client Interpretation questions test your ability to read, understand, and interpret the messages the client is trying to convey in the case question or description. To some extent, this is very similar to GMAT verbal questions. Question formats: 

Which of the following best summarizes the CEO’s concerns?

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Which of the following statements best describes the thoughts of the CEO regarding…?

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Based on the opinion of the head of Department, which of the following statements is valid?

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Which of the following statements best describes the CEO’s aims for the McKinsey research?

2. Technique Technique No.1: Read the facts in the case description first before going to the multiple choices! Normally the strategy of scanning through the answers first before going back to the case description works when you have a very long case description and don’t know where to look for the right information. Scanning through the answers helps you get a more focused read on the case description. However, the client’s assertion is typically found in a very short and specific part of the case description. So once you realize it’s a Client Interpretation question, go back to the case description and find that very specific part of the client’s assertion. Make 1

sure you understand it very well. Then the rest of the work is just determining which of the four choices has the same meaning as the original assertion. Technique No.2: Recognize a few words or short phras phrases es that make a choice incorrectly reflect the client’s assertion The techniques that would allow you to quickly and correctly cross out the wrong choices will take a bit more practice. Typically, a choice is wrong simply from a few key words or short phrases. Notice that even though what they suggest can be likely or even true in the context of the case, if they are NOT mentioned by the client, they are the wrong choices. When practicing, try to identify those critical words or phrases.

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Reading Facts Question 1. What is it? Reading-facts is the most common question type in the McKinsey PST (38%) and the BCG Potential Test (up to 100%). These questions test your ability to understand the facts/data itself. There will be no inferring, logic, hypothesizing, or creativity needed. Instead, proficiency in chart reading and calculations will be handy here.

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Question formats The following are a few examples of typical question formats: 

Which of the following values is the best estimate of…?

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Which of the following statements is valid based on the data …?

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Which of the following can be concluded from Exhibit …?

Sometimes even though the word “conclude” is used, questions don’t require any logical reasoning, just your ability to read facts and perform basic calculations. In these cases, I still classify these questions into the reading-facts category. 2. Example of a reading facts question

This question is written based on an official McKinsey practice PST. Table 1

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Which of the following statements is valid based on the da data ta in Table 1? A) Soccer revenue was more than $325 thousand five years ago B) Tennis revenue grew by no less than 1.2% in each of the last five years C) The total revenue of Saigon League did not grow at all in the last five years D) If the growth rate in the last 5 years is maintained, Soccer revenue will be more than $420 k 5 years from now. ***

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You will see that no tricky logical reasoning is needed here. All you need in order to answer these questions is the ability to read the table and perform calculations correctly.

3. Common mistakes A good way to determine the correct option is to investigate if the other three are wrong. Now there are two ways you can be wrong in this type of PST question: (1) Incorrect calculation and (2) Misread tthe he facts/ data. Type #2 is harder to understand, so I will dive deeper into that here. Let’s look at the sample question above. Hope you got D, the correct choice. Example 1: How you can miss-read the data – Why A is wrong If you overlook the phrase “Average annual” on column 3′s title, then Soccer revenue 5 years ago would be: $342.8 k / (100% + 4.5%) = $328 k, which is more than $325 thousand. Revenue grew at the average rate of 4.5% in EACH of the last 5 years. It is NOT 4.5% over the whole period of 5 years. Example 2: How you can miss-read the data – Why B is wrong If you overlook the phrase “Average” in column 3′s title, then it seems like the growth rate for each of the last 5 years is exactly 1.2%, no more, no less. B, therefore, seems correct. However, as indicated in the table, the 1.2% is just an average figure, which means there are years with lower or higher growth rate. Example 3: How you can miss-read the data – Why C is wrong If you overlook the second column of the table (Revenue this year column), then it seems like the average overall growth rate for Saigon League is 0% (4.5% + 3.3% + 1.2% – 9% = 0%), which makes C correct. However, different lines have different sizes. Even though Golf had a negative growth of 9%, it is a relatively small line so its impact on the overall rate is small as well. *** Again, PST is a simple test… when you have enough time!

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4. Preparation Guide I am always amazed that up to 38% of your success depends on questions that require very basic skills. Your overall PST result can be greatly improved simply by focusing on the fundamentals. Skill #1: Calculation We have a detailed article on Consulting Math and how to strengthen your quantitative proficiency Skill #2: Chart/exhibit/table reading Always take a moment to read and understand every single chart or graph you encounter in your everyday life. After all, practice makes perfect. Skill #3: Attention to details The devil is in the details. It’s the little things that can make or break a project, and no true consultants would let themselves be caught unaware. 

Develop the habit in daily life. Have the mindset that I am not going to miss any stupid details.

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For every practice question you get in this type, make sure you understand not only why an answer is right, but also why an answer is wrong, exactly like what I did above.

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Root-cause Reason Question 1. What is it? This question gives you a particular set of facts/data and asks you to identify what could be the cause for them.

1.1 Question format The following are few examples of typical root-cause reason question format: 

“Which of the following reasons, if TRUE, will help explain the Facts …”?

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“Which of the following does NOT explain the Facts …”?

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“Which of the following points is NOT a valid reason for the Facts …”?

1.2. Root-Cause Reason vs. Fa Fact-Based ct-Based Conclusion These questions are often mistaken for Fact-based Conclusion ones, which could slow your study progress in preparation for the test. You can see the differences explained point by point in the table below.

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*** 1.3 Example Facts provided: Visits to the website MConsultingPrep were relatively low last month. Root-cause Reason Question: What reasons, if TRUE, would help explain the low traffic to MConsultingPrep last month? The correct answers can be any of the following: 1. The quality of contents has been bad 2. Because of technical issues, some visitors could not access the website 3. Last month was December when the overall demand for job prep materials is lowest in the year 4. Other new consulting prep blogs opened recently Fact Fact-based -based Conclusion Question: What can be concluded from the data provided? All of the statements above can be the reason for the stated fact, but NONE of them can be concluded from it. An example of a statement that can be concluded: Because the conversion rate stayed constant over the years, revenue last month was relatively low.

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2. Common Pitfalls What makes a statement NOT a potential reason for a particular fact? There are two ways a statement cannot be the potential reason: (1) Wrong

Subject and (2) Wrong Trend. 

A statement is (1) Wrong on Subject when the subject is irrelevant, which means the statement have zero effect on the phenomenon mentioned in the stated fact.

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A statement is (2) Wrong on Trend when the direction is reversed, which usually means the statement has a reversed effect on the phenomenon mentioned in the stated fact

Illustrative example Let’s continue with the simple example above. The Stated Fact: Visits to the MConsultingPrep blog were relatively low last month. (1) Example of a “Wrong Subject” statement: “Some new Investment Banking

Prep blogs opened recently” Here the subject “Investment Banking Prep blogs” is irrelevant to the stated fact. The statement (1) will have zero effect on the stated fact. (2) Example of a “Wrong Trend” statement: “Some other existing Consulting Prep blogs closed recently” Here, even though the subject “Consulting Prep blogs” is relevant, the trend is reversed. The exit of Consulting Blogs will increase visits to MConsultingPrep. Therefore, statement (2) will have an opposite effect on the stated fact. 3. Challenging Example You may find the example above too simple to prompt such a complicated approach. We picked a simple example to better convey the concept to you first. However, the same problem on the real McKinsey Problem Solving Test can be much more confusing. Let’s try one right now!

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Fact Fact-based -based Conclusion Question 1. What is it? Once you get into consulting, you will probably hear the term “fact-based” a million times a day. Consulting is the business of making conclusions based on

facts . We face tons of different problems throughout the course of any project: from the top to the granular level, from function to function, from industry to industry, etc. Fact-based conclusion is such a fundamental aspect of consulting that it weighs in heavily on the Problem Solving Test. I personally think this is the most difficult, interesting, and crucial question type in the test. If I were to write an analytical entrance test for my own firm, this question type would absolutely play a central part in that test. So let’s get into it.

Fact-based conclusion questions test your ability to draw and recognize sound and logical conclusions based on a set of data/facts provided.

Examples of question format 

Which of the following statements is a valid conclusion based on …?

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Which of the following statements can be concluded from …?

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Fact Fact-Based -Based Conclusions vs. Reading Facts In some aspects, fact-based conclusions and reading facts questions are similar. In both cases, you are given a set of facts/data and are asked to read and then draw a conclusion from it. The key difference is that reading facts questions only test your ability to read the facts and do minor calculations, while fact-based conclusion questions require dealing with sophisticated logic and reasoning skills. Of course, it’s necessary to keep in mind that there is no definite line between “minor calculations” or “sophisticated logic and reasoning”. Nevertheless, two extreme ends need two different sets of skills and techniques, although there will also be questions that require both. All in all, it is not as important to distinguish between the two types as it is to know and master the skills needed for both. Fact Fact-Based -Based Conclusion vs. Root-Cause Reasons Unlike the case right above, distinguishing fact-based conclusion and root-cause reason is much more important. There is a clear difference between determining a potential reason or hypothesis for a set of facts/data (root-cause reasons) and drawing a conclusion from those facts/data (fact-based conclusion).

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2. Conclusive logic 101 – TRUE TRUE// FALSE/ UNPROVEN conclusions Any proposed conclusion must fall into one of the following three groups. It is either (1) proven TRUE, (2) proven FALSE, or (3) unproven. The key to answering fact-based conclusion questions is to identify which of the three groups above a proposed conclusion belongs to. Theoretical illustration A is an entity that has n parts. X is a quality. 1 – Proven TRUE conclusion “A is X” when and only when ALL A1, A2, A3, … An is X. 2 – Proven FALSE conclusion “A is X” when ANY of A1, A2, A3, … An is NOT X. 3 – Unproven conclusion “A is X” when (NOT YET ALL A1, A2, A3, … An is X) and (NONE of A1, A2, A3, … An is NOT X) Real life illustration Let’s look at a conclusion: “The Boston Celtics (a professional basketball team) were undefeated in December.” It is proven TRUE when: All the games of the Boston Celtics in December have been played and they didn’t lose any game. It is proven FALSE when: You can point out any game the Boston Celtics lost in December. It is UNPROVEN when: You have not looked at all the games the team played in December. 3. Conclusive logic 102 – fit-we fit-well ll vs. fact-based conclusions As discussed above, a proposed conclusion can be in one of the three groups. However, the most confusing and misleading is the unproven group. Often times, the question will propose a conclusion that seems to fit really well with the case. However, if the facts/data available are not enough to support that conclusion, it cannot be a proven true conclusion. Let’s look at a simple example.

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*** Fact A: The campus looks so empty now.

Conclusion C1: It’s Christmas Eve! Conclusion C2: Students of this university are just not interested in studying! Conclusion C3: There are fewer professors around today! All of the above conclusions fit well with Fact A. 

C1 fits because if it’s Christmas Eve, students will be at home celebrating Christmas with their family. That would explain why the campus looks empty.

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C2 fits because if this school’s students don’t like studying, they will probably skip classes. That would explain why the campus looks empty.

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C3 fits well because if the professors are not around, there will probably be fewer classes today.

But none of the above can be concluded. I will disprove those conclusions by pointing out scenarios where Fact A still holds and conclusions C1, C2, C3 are false. 

C1 cannot be concluded because it might be in the middle of September, or the campus might be empty because it’s Sunday

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C2 cannot be concluded because the campus might be empty just because there’s a hurricane in the area and students are encouraged to stay at home

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C3 cannot be concluded because it might be staff conference day, which means all classes are canceled but the professors will still have to be present

Here’s a good and sound conclusion: “ You would meet fewer students if you took

a tour of the campus right now”. If the campus looks empty right now, you will surely meet fewer people on campus. This conclusion is supported by fact A A!

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4. Fact-based conclusion question – Bi Bingham ngham Mine

This question is written based on an official McKinsey practice PST. *** The McKinsey team has an interview with the Chief Operating Officer of the New Bingham Mine, Salt Lake City. During the interview, the following facts have been gathered: 

The factory must have at least one safety inspector 24 hours a day, seven days a week, in accordance with Federal and State labor regulations.

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To maximize operational efficiency, there must be exactly 10 line workers operating the mine.

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The mine operates from 8am until 5pm, Monday to Sunday.

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The mine employs 4 safety inspectors and 16 line workers to make 20 workers in total.

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The total weekly labor cost for the Bingham Mine is $16,000.

Which of the following statements is a valid conclusion? A. One fifth of the total labor cost for the mine is for safety inspectors B. At least one safety inspector must work more than 40 hours per week C. Line workers do not work more than 40 hours per week D. The majority of the mine’s labor cost is for line workers ***

Find the answer key next page...

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A – Fit-well but not fact-based There are 4 inspectors out of 20 employees so it seems like cost of inspector can very well be 1 / 5 of total labor cost. But a missing piece of data to conclude that is: does each person get a similar total income?

C – Fit well but not fact-based The mine opens for 9 hours per day, 7 days per week, and there must be 10 line workers at a time, so it is 630 man hours per week at the line positions. There are 16 line workers, so on average each of them only needs to work 39 hours per week. This seems to fit very well with the proposed conclusion: line workers do not work more than 40 hours per week. However, a missing piece of data to conclude that is: does every line worker works the same amount of time (if not, there can be some who work over 40 hours while others work less)?

D – Fit well but not fact-based Similar to A, there are more line workers, so it seems like the total cost for line workers is more than the total cost for safety inspectors. But a missing piece of data needed to conclude that is: does each worker get paid the same amount?

Only B is proven true by the provided facts. There are 24 * 7 = 168 inspector hours needed in a week, equaling 42 hours per week per inspector. So there must be one who works more than 40 hours. *** Identifying proven true conclusions is an important foundation to master all conclusion-related questions. However, most conclusion-related questions in the McKinsey Problem Solving Test will be given in other formats. In this section, we will learn about the two types of twists: (1) False conclusions and (2) Conclusions

reversed. Let’s start with the first one.

5. Twist type 1: False conclusions As discussed above, any proposed conclusion must fall into one of the following three groups: Proven TRUE, Proven FALSE, and Unproven. This twist is when a question asks you to identify the FALSE conclusion instead of the TRUE conclusion conclusion.

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Typical question format

Which of the following statements is FALSE based on …? Which of the following statements is FALSE based on … ? Methodology A proposed conclusion is proven false when you can point out at least one instance where the conclusion is wrong. Similarly, with true conclusion questions, unproven conclusions should also not be selected. Notice that proven FALSE conclusions are NOT conclusions not proven TRUE. A conclusion will stay unproven until it is proved to be TRUE or FALSE. Example

This question is written based on an official McKinsey practice PST. *** Table 1

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Which of the following statements is FALSE based on Table 1? A. Rancho Engineering had lower average economic growth in the last five years than Silencer, Inc. B. Rancho Engineering had higher average economic growth in the la...