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First, it’s important to understand what is meant by these terms. The sell side refers to investment banks like Goldman Sachs and Morgan Stanley, which sell products to investors. The buy side refers to investment banks’ clients (mutual funds, pension funds and other entities often called institutional investors) that buy the stocks, bonds, and securities sold by the investment banks.
As for answering this question, there are several good responses, and you should tailor your response so that it is truthful and fits in with your goals. If you are interviewing for both buy and sell side positions, you should be honest about this and talk about your interest in uncovering undervalued securities. You should also make certain that your answers mesh with the desired skills mentioned above.
If you are going for only buy- or sell-side positions, you should not deride the area you are not interested in. Many of your interviewers will have spent part of their career on both sides of the divide. You should also not state that you want the buy side because you think the hours are better (even though they generally are) because you don’t want to come across as lazy.
You also don’t want to say that you want the sell side because you want to focus on a particular industry. Most banks only place new associates in particular areas if they have expertise (i.e. someone who worked at Disney before business school in the media group, or a medical doctor in health care). Financial analysts are even less likely to get the group they want. Most likely, you will end up wherever there is an opening. So even if you really want biotech, be prepared to cover the automobile industry.