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

026Which is cheaper right now, US bonds or US equities?Credit spreadsHardtechnicalPIMCODebt Capital Markets · San Diego · 2026
Say this
Compare them on a like-for-like yield basis: the equity risk premium against the credit risk premium. Take the S&P earnings yield minus the 10-year Treasury yield, and set that against investment grade and high yield spreads. When the equity risk premium compresses toward the credit spread, bonds are the better paid risk.
Then walk it
1. The bond side is observable: the 10-year Treasury yield plus the investment grade spread gives you an all-in corporate yield, and it is contractual, senior and dated.
2. The equity side needs a proxy. Forward earnings yield, which is one over the forward P/E, minus the Treasury yield gives you a rough equity risk premium. At a 20 times forward multiple that earnings yield is 5 percent.
3. The comparison that has mattered since 2022: when investment grade yields sit near 5 to 6 percent and the equity risk premium is compressed toward 100 basis points or below, you are being paid almost the same to sit at the top of the capital structure as at the bottom. That is historically unusual and it is the honest case for bonds.
4. Then the qualifications, which is where the marks are. Equity earnings grow and coupons do not, so in an inflationary world equities have the better long-run real claim. And the earnings yield is a forward estimate, so it is only as good as consensus.
5. So the answer should be a framework plus a current read plus a horizon. Something like: on today's numbers bonds look better paid on a risk-adjusted basis over three years, equities over twenty.
6. And say what would change your mind: an inflation re-acceleration hurts the bond case directly, because you lose the real value of a fixed coupon.
Where candidates lose it
Picking a side with no metric. The question is testing whether you can make two asset classes comparable, so the framework matters more than the conclusion. Check the current earnings yield and IG spread level the morning of the interview, and state your figures with the date.
Expect next
- What is the equity risk premium right now?
- Does that comparison hold at a 20-year horizon?
- What would change your view?
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