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
Asked at
All firmsTruist Securities5PIMCO4TD Securities4Apollo Global Management3Nomura3Scotiabank3Bain Capital2Houlihan Lokey2Mizuho2Neuberger Berman2Oaktree Capital Management2RBC Capital Markets2Carlyle Group1Deutsche Bank1Golub Capital1HPS Investment Partners1Invesco1KKR1Lazard1Moelis & Company1Moody's1Northern Trust1Nuveen1Rothschild & Co1S&P Global1Wells Fargo Securities1
Topic
All topicsBond mechanics11Duration and convexity6Yield curve and rates5Credit spreads5Credit analysis and ratings13Credit modelling9Primary issuance9Syndication and loans10Structured credit7Covenants and documentation5Liability management5Indian debt markets7Fit8
Level
AnyCoreIntermediateHard
Type
AnyTechnicalBrainteaserMarket viewCaseFit
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  1. 025Your bond's spread tightened 50 basis points, but Treasuries sold off 75. What happened to the price, and how did you do against the index?Credit spreadsIntermediatetechnicalCredit researchFixed income asset management

    Say this

    The all-in yield rose 25 basis points, so the price fell — roughly 1.75 percent on a 7-duration bond. But you outperformed, because the credit component went your way. Absolute return negative, relative return positive, and which one matters depends on the mandate.

    Then walk it

    1. Decompose the yield: yield equals the Treasury yield plus spread. Treasury up 75, spread down 50, so net yield up 25 basis points.
    2. Price effect: minus duration times 25 basis points. At duration 7 that is minus 1.75 percent, before convexity, which claws back a couple of basis points.
    3. Excess return is the part you get paid on as a credit manager. Spread tightened 50 basis points, so excess return over duration-matched Treasuries is roughly plus 3.5 percent at 7 spread duration. You beat the benchmark comfortably while losing money.
    4. This is exactly why credit mandates are measured on excess return and why most credit funds hedge or neutralise duration. The rate call is not what they are hired for.
    5. A real episode to reference: much of 2022 looked like this. Credit spreads were volatile but the dominant loss driver was the 400-plus basis point move in Treasury yields, so credit managers who picked well still delivered double-digit negative total returns.
    6. The thing to add unprompted: if your investor measures you on total return, a correct credit call does not save you. Explaining a negative absolute number to a client who does not distinguish the two is a real part of the job.

    Where candidates lose it

    Answering only one of the two questions. There are two: what happened to the price, and how did you do. Give both, with the arithmetic, and name excess return explicitly. Missing the sign on either component is the fast way to fail this.

    Expect next

    • How would you have hedged out the rate move?
    • What is excess return and how is it calculated?
    • Which matters more to your client?

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.