Debt Capital Markets interview preparation

Bond mechanics, duration, credit spreads, ratings, primary issuance, syndicated loans, structured credit, covenants and liability management, plus the Indian debt market. Every question is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it.

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Question bank

100 questions, mapped to the firms that asked them

Questions: 100
Traced to a firm: 45
Firms: 26
Updated: September 2026

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012What is duration, explained the way you would explain it to a client?Duration and convexityCorephone / first roundPIMCODebt Capital Markets · San Diego · 2026
Say this
Duration is how much your bond's price moves for a one percent change in yields. A duration of 7 means roughly a 7 percent price fall if yields rise 100 basis points. Underneath, it is the weighted average time until you get your money back.
Then walk it
1. Two readings of the same number. Macaulay duration is a time: the present-value-weighted average years to the cash flows, quoted in years. Modified duration is a sensitivity: the percentage price change per 100 basis points.
2. Modified equals Macaulay divided by one plus the periodic yield, so for normal yields they are close, and people use the words loosely. Say which one you mean.
3. What makes duration long: long maturity, low coupon, low yield. All three push more of the present value further into the future.
4. The client version: duration is your interest rate risk budget. A fund with duration 2 loses about 2 percent if rates rise 100 basis points. A fund with duration 15 loses about 15. Same credit, totally different instrument.
5. It is a first-order approximation, valid for small moves. For a 200 basis point move you need convexity, which corrects the fact that the price-yield curve bends.
6. And the framing that matters on a debt desk: duration is what a rates trader hedges and what a credit investor tries to neutralise so that what is left is the credit view.
Where candidates lose it
Conflating Macaulay and modified duration, or reciting 'weighted average time to cash flows' without ever saying what it is used for. A client and an interviewer both want the sensitivity first, then the definition.
Expect next
- So how does duration affect what happens when rates move?
- What is DV01 and how is it different?
- How would you reduce the duration of a portfolio?
Reported by candidates at PIMCO (Debt Capital Markets, San Diego, 2026). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.

100 questions, mapped to the firms that asked them

Say this

Then walk it

Where candidates lose it

Expect next