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Fixed Income Analyst Interview Questions

Fixed Income is cool like this building

Despite our name, we are very interested in expanding the investment analysis and asset management segments of our website because we love investing (which does not make up for some of the awful calls made littered over the site such as our USDCAD bet – evidence to disregard certain sell side research).

As such, we have curated some select asset management questions that are par for the course for any junior fixed income positions (including Debt Capital Markets). Standard credit questions that would be expected from a corporate banking or counterparty credit interview would also be fair game.

Topics will include duration (for individual securities and portfolios), convexity, credit analysis, metrics (leverage, coverage), macroeconomics (interest rates, sovereign risk, inflation, foreign exchange), bond indentures (legal contract for the bond issue), and a bond pitch.

  1. Bond A and Bond B mature in 10 years and are of the same credit quality. One has a 3% coupon and one is a zero coupon. Which one has a higher duration?
  2. How do you calculate the duration for a portfolio of bonds?
  3. What is convexity? What bonds would exhibit negative convexity?
  4. Where are rates going?
  5. Where is inflation going?
  6. What is the Federal Reserve going to do in the next year and why?
  7. What is the mandate of the Federal Reserve?
  8. Who is the Chair of the Federal Reserve? What about before her? What about before him?
  9. What is the Bank of Canada going to do?
  10. What is the People’s Bank of China going to do?
  11. Who is Mario Draghi?
  12. What is relative value analysis?
  13. What are some bond covenants that you would commonly see?
  14. Why would some sub-investment grade debt have very weak covenants (pertaining to fallen angels)?
  15. What sector are you overweight on? What sector are you underweight on?

Related Reading for Fixed Income

Fixed IncomeChina Stocks Investing: New Cold War and Bond Defaults · Distressed Debt Overview · Spreading Investment Banking Comps: Net Debt · High Yield Bond Characteristics · Introduction to Green Bonds · Understanding the Yield Curve · Interview with: Private Debt Analyst · Interview with: Credit Rating Agency Analyst · Fixed Income Analyst Interview Questions · Collateralized Bond Obligation (CBO) and Collateralized Loan Obligation (CLO) and Collateralized Debt Obligation Trusts (CDO) ·
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