Broadly the capital market work and job profiles fall into four principal areas: corporate finance, sales, trading and research. All of these areas are quite different from each other and require different kind of expertise.
Corporate finance: Corporate finance is a generic term for the work involved in capital raising, underwriting, and financial advisory services, including mergers and acquisitions. Firms typically hire both undergraduate and MBAs for their corporate finance division. In general, undergraduates are hired for two to three years and are assigned the title of analyst where as post graduates and MBAs are considered for the position of Associates. Largely the work involved in these roles includes gathering data, building and updating different valuation models, creating proposals and pitch books and understanding lengthy transaction documents.
Depending on the company, the M&A may be a separate unit or fall within the corporate finance arena. The typical work involves advising companies that wish to merge with, or acquire, others. M&A revolves around the deal of the moment and can be entirely unpredictable. Professionals working in this industry are typically known as Investment Bankers / Bankers.
Research: Research is another integral part of the investment banking. The sell side of investment banks are typically involved in the selling (research) of securities. This is different from buy side research which is used to refer to institutions that buy securities and manage large portfolios. The research departments spend majority of their time analyzing financial data, interviewing people in the industries they cover, writing about specific companies and the economy, and making recommendations about purchasing and selling various financial instruments.
Research division typically has flat hierarchy, with a team consisting of around 2-4 people. Also, the designation structure followed in research is opposite to that used in M&A. People coming in from college programs are called associates where as professionals with several years of experience in tracking particular industry are referred to as an analyst or lead analyst. The lead analyst work mostly involves marketing, interacting with clients such as portfolio management firms, investment houses, hedge funds, etc, and engaging with company management. Associates typically assist lead analyst in gathering data, creating and updating company valuation models and report writing. Professionals working in this profile are known as equity analyst.
Sales and Trading: Sales and trading jobs are split between institutional sales and trading and then broken down further between equity (stocks) and fixed income (bonds). Professionals who want to work as a trader have a choice between trading for the firm, also known as proprietary trading or for the clients. At most Banks, undergraduates and graduates are hired into a training program and then begin a series of rotations in different business or trading asset classes, they are assigned a fixed position.
The hiring and interview process in sales and trading may not be as structured as in corporate finance and research jobs. Most of the hiring managers typically look two key skills in fresh graduates while interviewing; ability to do fast paced calculation or number crunching, and taking quick decisions in pressure situations.
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