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

Showing 1–1 of 1 · filtered from 100Clear filters

005A bond has a 6 percent coupon, 5 years to maturity, and trades at 95. Roughly what is the yield? Do it in your head.Bond mechanicsIntermediatetechnicalSyndicate desks
Say this
About 7.2 percent. Coupon income is 6 on 95, so 6.3 percent, plus 5 points of pull to par spread over 5 years, which is about 1 point a year or another 1.05 percent on a 95 price. Add them and you get roughly 7.3, and the true answer is 7.2.
Then walk it
1. The approximation is the coupon plus the annualised capital gain, all over the average of price and par. That is the standard back-of-envelope yield.
2. Formally: 6 plus 5 over 5, so 7, divided by the average of 95 and 100, which is 97.5. That gives 7.18 percent.
3. The reason the shortcut slightly overstates is discounting: the pull to par arrives at the end, so its present value is less than a point a year.
4. Sanity check the direction first. It trades below par, so the yield must be above the 6 percent coupon. Getting the direction wrong is fatal; being 10 basis points out is not.
5. The desk habit worth showing: quote it as roughly 7.2 and say you would price it exactly on the calculator. Interviewers want the instinct plus the discipline, not false precision.
Where candidates lose it
Reaching for a calculator, or freezing. This is a mental arithmetic test dressed as a bond question. State the direction first, then the approximation, then say you would confirm it precisely. Never quote a number to three decimals from a mental estimate.
Expect next
- Now do it for a bond trading at 105.
- What if it had 20 years to maturity instead of 5?
- What is the duration of that bond, roughly?

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

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