59 Fixed-Income Interview Questions With Sample Answers
Updated 30 September 2022
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A fixed income trader is a finance expert who analyses, purchases and sells bonds and other financial investment instruments on behalf of their clients. Often these professionals work for banks or brokers, though they may also serve individuals or retail clients. If you are applying for a position as a fixed income trader, it may be helpful to review common interview questions before your interview. In this article, we list 59 fixed-income interview questions you may get in an interview for a fixed-income trader or analyst, with sample answers for a few.
20 General Fixed-Income Interview Questions
Fixed-income interview questions typically begin with a series of broad questions to learn more about you as a candidate and as a person. This can be an excellent opportunity to demonstrate your personality and communicate with the interviewer effectively. You may also customise your responses to the role for which you are interviewing to ensure that they are relevant. Here are 20 common questions you may encounter:
Why do you want to work with our company?
What do you know about the history of our company?
Why did you choose to enter this industry?
What makes you a suitable candidate for this position?
What are your long-term career goals?
What qualities do you look for in your coworkers?
What is your biggest strength?
How did you hear about this job opportunity?
Where do you see yourself in five years?
Are you comfortable relocating to a different location?
What qualities do you look for in a manager?
Are you currently interviewing for any other positions?
What qualities does a good leader have?
What do you like to do outside of work?
Are you willing to work unconventional hours?
Tell me about a time when you asked someone for help.
Tell me about a time when you helped a coworker.
What values do you prioritise in the workplace?
What do you hope to gain from this position?
What are your salary expectations?
Related: How To Answer The Salary Expectation Question In Job Interviews
15 Questions About Experience And Background
Often, interviews include questions regarding your work experience. Your interviewer may enquire about your educational or professional background to assess your suitability and want to learn more about your special areas of interest and skills. Experience-related questions can be a good chance to highlight the abilities and knowledge that make you a valuable candidate. Here are 15 common interview questions regarding experience and background:
What do you like most about your previous job?
In what ways has your education prepared you for this role?
Tell me about a time when you expected a challenge and averted it successfully.
What skills have you gained through your professional experience?
Tell me about your professional experience.
Tell up about a typical day in your previous position.
What data analytics tools are you familiar with using?
What is something you appreciate about your last manager?
Tell me about a time when you made a challenging decision as a fixed income trader.
In what office environments are you most comfortable working?
Tell me about a time when collaboration helped you in your previous jobs.
What is something you wish your last manager did differently?
What techniques have you found most useful as a fixed income trader?
Tell me about a time when you took on a leadership role in your past work.
Have you ever completed a professional certification course? If so, tell us about it.
Related: 5 Common Tricky Interview Questions (With Example Answers)
20 In-Depth Fixed-Income Interview Questions
Interviews for positions in fixed-income trading may also involve in-depth technical questions regarding finance, banking, investment and trading. Some interviews for the position of fixed income analyst or trader involve mathematical or logical challenges. These questions may offer you the chance to demonstrate your industry expertise and quantitative aptitude.
Here are 20 detailed interview questions a hiring manager may ask:
What is the main role of a fixed-income trader?
What is relative value analysis?
Explain risk and return.
Define the desired price.
What is the difference between a loan and a bond?
What other major international financial institutions do you track or plan to track in your work?
Why is a yield curve important?
How familiar are you with cash flow statements?
Explain infrastructure bonds.
If you receive a large sum of money as a gift, how will you invest it and then manage that investment?
What financial statements do you have experience interpreting?
What do you find most challenging about being a fixed-income trader?
What impact can the Federal Reserve have on your work?
Which desk within fixed income interests you the most?
If you roll a six-sided dice three times, what is the probability of rolling the same number every time?
Tell me what you consider the three most important income trading terms and define them.
If you are hiring someone for a fixed income analyst position, what do you look for in a candidate?
What is the difference between investment-grade and high-yield debt?
What does the current rate of inflation suggest about the future?
What do you find most rewarding about being a fixed-income trader?
Related: Problem Solving Questions For Interview (With Examples And Tips)
Fixed-Income Interview Questions And Sample Answers
Practising your answers to typical interview questions can be an effective approach to preparing for a job interview. Here are five interview questions and sample responses to help you draft your answers:
1. How do you handle stress?
Because of the obvious fast-paced environment of jobs in trading, finance and investment banking, interviewers may ask such questions. Sharing specific examples of stress management tactics you have employed in the past can be helpful when answering this question. You can also describe how these techniques can be useful for the common tasks in the job you are applying for.
Example: "I have developed various time and stress management strategies over the years that I employ when I have a long work week or a high-pressure assignment. Breathing exercises have been quite helpful in allowing me to reset and return to work with more energy and focus. Communication is also vital, as many of the jobs and responsibilities of those working in this profession depend on collaboration. Sharing my concerns with my coworkers or manager often helps find many solutions."
2. How does a bond differ from a loan?
The hiring manager may ask such a question to assess your understanding of the investment instruments. You can use this opportunity to explain the risk associated with each. To answer this question, focus on a few key distinctions based on issuer, repayment and liquidity.
Example: "A firm or central bank can issue bonds to raise capital from the public, whereas often only a financial organisation can issue a loan. The key distinction between bonds and loans is that bonds are highly liquid. A bond holder can sell it on the market before its maturity date. For a loan, the borrower repays the loan as equated monthly instalments. In the event of liquidation of a company, loan repayment gets priority before bonds. Though bonds have little high risk than loans, they are a much safer investment option than equity."
3. As a fixed-income trader, is it better to take risks or risk-averse?
An employer may ask this question to assess your technical understanding. This is a great opportunity to demonstrate your fixed-income investing and trading expertise. To answer this question, take one position and attempt to reason it using your understanding of the industry, explaining any necessary terms to make your response as clear as possible.
Example: "As a fixed-income trader, most clients seek stable capital growth. Because of this, I believe it is preferable to make informed and calculated risks, albeit with a risk-averse approach. I concentrate my efforts on discovering quality investment opportunities expected to yield considerable long-term returns for my clients. Though, I also strive to uncover the most lucrative options for my clients. I may consult with them if I believe they would be interested in a high-risk, high-reward position."
Related: Equity Trader Responsibilities (Trading Types And Skills)
4. Have you taken part in any finance-related extracurricular activities? If so, tell us about them.
Employers may ask this question to determine whether you have relevant work experience. This question can be a great opportunity to reflect on an experience that you believe has contributed to your professional development. To help the interviewer get to know you better, you may also discuss an experience that demonstrates your ideas or personality.
Example: "During my second year of college, I founded the university's first women-only finance group. We invited speakers, organised meetups and coordinated tours to connect women in the banking business with career prospects. In my senior year, we assisted in bringing the chief financial officer of an investment firm to speak at a conference on how women may navigate the finance industry.
I am also quite proud of the contributions I made to my last organisation and I continue to try my best to adhere to the ideals I established there. I noted on your website that equity in finance occupations is one of your organisation's fundamental values. This is one reason I am so happy to be considered for a position here."
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