PIMCO interview questions

A desk-level vocabulary question that connects yield curves to realised portfolio returns.

What are carry and roll-down in a bond portfolio? Why can a manager earn money even if yields do not move?

A practical allocation question for multi-sector fixed-income and client-portfolio interviews.

When would you favour Treasuries over investment-grade corporate bonds, and when would you do the opposite?

A first-round fixed-income operations check before a manager lets you discuss performance or trade execution.

A bond is quoted at a clean price of 98.40. It has accrued interest of 0.65 points per $100 of par. What cash price does the buyer pay, and why are bonds normally quoted clean?

A first-round check that you can describe a bond's return without mixing its terms.

A $1,000 par bond pays a 5% coupon and trades at $950 with five years left. Distinguish coupon, current yield and yield to maturity.

A basic calculation used to test whether a candidate can translate a rate view into portfolio risk.

Your bond portfolio has a modified duration of 6. If yields rise by 25bp, what happens to its value, and what does the estimate leave out?

A common first-round question for a manager who invests across government and corporate bonds.

A five-year corporate bond yields 5.2% and a five-year Treasury yields 4.4%. What is the 80bp spread compensating an investor for?

A scenario question that tests whether a candidate sees the difference between valuation and forced-sale risk.

Your daily-dealing corporate bond fund receives redemption requests equal to 12% of assets during a risk-off week. How do you respond?

A portfolio-review question testing whether you can explain a corporate-bond return without merely repeating its total return.

An investment-grade corporate bond has a Treasury duration of 5.0 and a spread duration of 4.5. During the month, its Treasury yield falls 20bp while its credit spread widens 30bp. Ignore carry and…

A core analyst question for a credit research rotation within a fixed-income manager.

You are considering a five-year bond issued by an investment-grade company. What would you analyse before buying it?

Tests whether you can distinguish realised inflation protection from an inflation forecast.

When would you buy an inflation-linked government bond instead of a nominal government bond of the same maturity?

A senior fixed-income interview scenario testing whether you can assess yield pickup against embedded-option and benchmark risk.

Agency mortgage-backed securities offer 70bp more spread than comparable Treasuries. You expect the central bank to cut rates over the next year. Should you add MBS to an active bond portfolio? Take a…

A final-round portfolio case that makes candidates prioritise several risks under one mandate.

You manage a core bond fund benchmarked to the Aggregate index. Growth is slowing, inflation is falling but still above target, and investment-grade spreads are tight. How would you position the fund?

A fixed-income portfolio-manager case during a busy primary market calendar.

A BBB issuer offers a new bond at a 20bp concession to its secondary curve. The syndicate says demand is strong. How would you decide whether to participate?

The second major allocation decision in a multi-sector bond mandate.

Investment grade spreads are at 90bp, near historic tights. Do you underweight credit? Walk me through the decision.

The dominant framework for pension and insurance mandates.

A pension fund is 95% funded. Explain liability-driven investing and what the fund is actually trying to manage.

The primary active decision in a fixed income mandate.

You run a bond fund benchmarked to an index with a duration of 6.5. You think rates will fall. How do you position, and how much risk is that?

A fixed-income portfolio-management replay after a government funding update changes the curve and sector valuations.

You help manage an intermediate-duration bond portfolio when a government borrowing update triggers a sharp curve move. Make the portfolio decisions as information arrives, then prepare a note for the…

A conceptual question that reveals whether a candidate understands the asset class.

Why is a market-capitalisation-weighted bond index a strange benchmark? What do managers do about it?

Asked on macro desks because inflation trades often start with breakevens.

What is breakeven inflation and how would you trade a view that inflation expectations are too low?

A foundational EM and FX macro question.

What is a current account deficit and why can it matter for a currency?

A first-round macro question testing whether you can read a common growth release without overclaiming from it.

What does a purchasing managers' index, or PMI, measure? A manufacturing PMI falls from 54 to 51 and then to 49. What has changed, and what has not necessarily changed?

Useful for commodity currencies and EM macro interviews.

A commodity-importing country faces a sudden oil price spike. Walk through the macro and market effects.

A harder EM macro question that links flows, reserves and policy.

How does a balance of payments crisis develop, and what market signals would you watch?

A senior-style macro judgement question on whether an apparently cheap currency is an opportunity or a policy-credibility trap.

An emerging-market currency is down 25%, screens cheap on real effective exchange rate, and offers a 15% policy rate. The government has pressured the central bank, imposed limits on converting local…

A desk analyst must estimate risk quickly before reaching for a pricing system.

You are long $10 million face value of a corporate bond priced at par with spread duration of 4.5. Its credit spread tightens by 20bp, while Treasury rates are unchanged. Estimate the price and dollar…

A foundational credit-trading question checks that a candidate can explain a spread as more than a default forecast.

Two five-year corporate bonds have the same Treasury benchmark, but Company A trades at Treasury + 120bp and Company B at Treasury + 260bp. What does the 140bp difference mean, and what would you…

New-issue pricing is a practical test of how a credit trader distinguishes valuation from primary-market technicals.

An issuer's outstanding five-year bonds trade at Treasury + 180bp. It launches a new five-year bond at Treasury + 205bp. Is the 25bp difference attractive, and what would you check before buying?

A credit trading interview uses this scenario to test trade expression, financing and basis risk rather than a generic CDS definition.

You expect a leveraged retailer's credit to weaken before earnings. Its five-year cash bond trades at 94 with a 7.0% coupon, while five-year CDS trades at 520bp. Should you short the bond or buy CDS…

Credit traders are expected to translate company news into debt-service and spread implications quickly.

A high-yield issuer reports EBITDA 15% below expectations after losing a major customer. The stock falls 25%, but its bonds are down only 2 points. How do you decide whether to sell, hold, or buy the…

One of the most reliable technical dislocations in credit.

An investment grade issuer is about to be downgraded to high yield. What happens to its bonds, and how would you position?

A practical allocation question for global portfolios.

Should a US investor hedge foreign currency exposure in a global equity and bond portfolio?

A regime-aware allocation question after the 2022 inflation shock.

What assets hedge inflation, and what are their drawbacks?

A multi-asset portfolio construction exercise with a fixed risk budget and changing correlations.

You inherit a balanced mandate with ten units of active risk. Allocate them across competing exposures, then rebalance when the inflation regime changes. Every allocation must use the full risk…

A harder question for pension and insurance-oriented allocation roles.

How does portfolio construction change when the investor has liabilities rather than just a return target?

A multi-asset allocation case after equities and nominal bonds fall together.

Equities and government bonds both sell off after an inflation surprise, leaving the portfolio below its volatility budget. How would you rebalance without mechanically buying the assets that fell…

A basic trading-desk question used to check whether a candidate understands what cash changes hands on a bond trade.

A 6.0% annual-coupon bond pays semi-annually on 30 June and 31 December. It trades on 31 March at a clean price of 92.00. Assume 90 days have elapsed in a 180-day coupon period and par is 100. What is…

A basic but important question for anyone pitching bonds or CDS.

A corporate bond trades 400bp over Treasuries. What does that spread compensate investors for?

Tests whether a candidate can avoid overstating carry and upside in a high-yield bond pitch.

A bond purchased at 102 can be called at 100 in one year or mature at 100 in five years. Its coupon is 8%. Why should you assess yield to worst rather than simply quote its yield to maturity, and what…

A fallen-angel scenario that tests technicals and fundamentals together.

An investment-grade issuer is downgraded to high yield. How do you analyse the trade?

Risk analysts are routinely asked to translate a rate sensitivity into an approximate P&L.

A bond portfolio has a DV01 of $85,000. What does that mean, and what is the approximate P&L if yields rise by 12 basis points? What would you check before relying on the answer?

Liquidity risk is a core risk-management topic for funds, dealers and asset managers.

A portfolio has attractive daily VaR but owns several thinly traded credit instruments. Why can it still be risky, and how would you measure the liquidity risk?

Market-risk teams use this first-round question to test whether candidates understand the loss tail rather than only a headline metric.

What is expected shortfall, and why might a risk team use it alongside a 99% VaR?

Credit-risk teams use this to test whether candidates look beyond default as the only adverse outcome.

Why does a corporate bond investor care about credit migration if the issuer never defaults? Walk through the risk of a BBB bond being downgraded to BB.

Foundational screen for any fixed income or markets role.

Explain intuitively and mathematically why bond prices move inversely to yields. Which bond falls more when rates rise by 1%: a 2-year or a 30-year? Why?

Expect this in every fixed income interview, often with a calculation.

Define Macaulay duration, modified duration and convexity. A bond has a modified duration of 7 and convexity of 90. Estimate the price change if yields rise 150bps.

Essential for rates and macro roles.

Explain the relationship between nominal rates, real rates and inflation expectations. What is a breakeven inflation rate, and how would you trade a view that inflation will be higher than the market…

Credit trading and research interviews start here.

Define a credit spread. What components does it compensate for, and why do spreads historically exceed what realised default losses would justify?

Tests whether a candidate separates the face amount of a claim from its economic value.

You buy $100m face value of first-lien debt at 65. What does "at 65" mean, and what determines whether the trade is attractive?

Core to securitised products desks; also a favourite curveball in rates interviews.

Explain how a mortgage-backed security works and why it exhibits negative convexity. What is convexity hedging and how can it amplify moves in the rates market?