Financial Analysis interview preparation

Questions

100

Traced to a firm

42

Firms

28

Updated

September 2026

Asked at

All firmsMoody's7Bain Capital3SSState Street3AMAres Management2BLBlackRock2DED.E. Shaw2MSMorgan Stanley2Oaktree Capital Management2S&P Global2Bridgewater Associates1Citadel1FTFranklin Templeton1Golub Capital1HWHarris Williams1Houlihan Lokey1J.P. Morgan1Jane Street1MWMarshall Wace1Millennium Management1Morningstar1PIMCO1Sycamore Partners1TSTruist Securities1Two Sigma1Vanguard1WMWellington Management1Wells Fargo Securities1Wolverine Trading1

Topic

All topicsThree statements9Accounting policy and standards5Working capital and cash7Ratio analysis8Forecasting and budgeting9Variance and management reporting7Unit economics and costing8Capital budgeting7Cost of capital and valuation7Markets and rates5Modelling, Excel and data8Business partnering6Brainteasers and estimation4Fit and career10

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Type

AnyTechnicalCaseBrainteaserMarket viewFit

1. 064Given a portfolio of three bonds, explain how the portfolio changes if duration increases.Cost of capital and valuationHardtechnicalPIMCOGeneralist · Los Angeles · 2026

   Say this

   Higher duration means more price sensitivity to rates. Portfolio duration is the market-value-weighted average of the three bonds' durations, so if it rises, the same 100 basis point move now costs or earns you more, and the portfolio has become a bigger bet on the direction of rates.

   Then walk it

   1. The mechanics: the percentage price change is roughly minus modified duration times the yield change. Move portfolio duration from 4 to 7 and a 100 basis point rise takes you from about minus 4 percent to about minus 7.
   2. Portfolio duration is weighted by market value, not by face value or by count. So you can raise it by swapping the short bond for a longer one, by shifting weight toward the longest bond, or simply because yields fell and the long bond is now a larger share of the portfolio.
   3. Duration also rises mechanically when coupons are lower or yields fall, because more of the present value sits further out. That is why a portfolio's duration drifts even when you trade nothing.
   4. At higher duration, convexity matters more. The linear duration estimate understates the gain when yields fall and overstates the loss when they rise, and the error grows with the size of the move, so for anything beyond about 100 basis points I would use duration plus convexity.
   5. The risk statement I would give a treasurer: you have increased carry and increased interest rate risk together. If the curve steepens against you, the long bond does most of the damage, and a 20 crore portfolio at duration 7 loses roughly 1.4 crore on a 100 basis point rise.
   6. And the limitation: duration only captures a parallel shift. Three bonds at different maturities are exposed to the shape of the curve, so I would also look at key-rate durations rather than one number.

   Where candidates lose it

   Saying only 'the portfolio gets riskier'. Give the numeric sensitivity, say that portfolio duration is market-value weighted, and name convexity and the parallel-shift assumption. Those three points are what the question is screening for.

   Expect next

   • How would you reduce duration without selling the long bond?
   • What does convexity add?
   • What if the curve steepens rather than shifts in parallel?

   Reported by candidates at PIMCO (Generalist, Los Angeles, 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.