Nick's Finance Interview Questions

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This section is on Finance Interview Questions...

Largely Fixed Income.

These are some of my favourite interview questions to ask in a finance interview.

If you have questions you've been asked and you want an answer, Contact  

Bond duration, in the

Bond duration, in the broadest sense, is the amount of time that must pass before a bond issue reaches maturity.

Within this process, close attention is paid to the actual worth of the bond as it moves toward maturity.

Calculating the value duration of a bond is relatively simple when the rate of interest applied is fixed, although determining the current value of a variable rate bond at a specific point in the maturation process is not particularly difficult.

10y 5% coupon bond

10y 5% coupon bond

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5. Finance Interview Questions - Relative Value

What is a better measure of the relative value of a bond ?
.. Yield or Asset Swap Spread ?



A measurement of one

A measurement of one investment or financial instrument's value relative to another's.

For example, an investor may want to compare the financial ratios of two different stocks to determine which stock will be purchased.

The investor is determining the value of one stock relative to another.

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4. Finance Interview Questions - What is an Asset Swap ?

What is an Asset Swap ?

An exchange of two assets.

An exchange of two assets. For example, one type of asset swap is the exchange of a fixed asset, such as a Treasury Bond with fixed and guaranteed payments, for a floating asset such as an index fund, which does not have a fixed or guaranteed return. Asset swaps are done most often in order to achieve a more favorable payment stream, and typically involve debt obligations.

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3. Finance Interview Questions - What is an interest rate swap ?

What is an interest rate swap ?

interest rate swap

An exchange of interest payments on a specific principal amount.

This is a counterparty agreement, and so can be standardized to the requirements of the parties involved.

An interest rate swap usually involves just two parties, but occasionally involves more.


IRS is interest rate exchange of benefits between 2 counter parties with comparative advantage.