Asset Management
Prepalyst has 21 fixed income interview questions with model answers, covering duration and curve positioning, spread decisions and index construction. Every question is graded on technical accuracy, completeness and interview communication. Practice is free.
Tests whether you can match a straightforward client objective to an implementable fixed-income portfolio.
A client needs predictable annual cash flows for the next five years but worries rates may rise. How would a bond ladder help?
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?
An entry-level risk question for benchmark-aware active fixed-income roles.
What is tracking error, and why can two bond funds with the same benchmark have very different tracking error?
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 realistic portfolio-management scenario for an open-ended bond fund facing client redemptions during a risk-off session.
Your investment-grade bond fund receives a $75m redemption request at 10:00am while credit spreads are widening. The portfolio has $20m of Treasury bills, $40m of recently issued liquid industrial bonds, and $60m of…
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 convexity. Estimate…
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 view and identify…
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 portfolio manager.
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?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.