"How would you explain bond duration to your grandmother?"

How the hell does anyone answer this question? I was asked twice and simply just couldn't go around it. Too many variables that need to be explained first!

When interviewers ask this question, what answers are they looking for exactly? 

 

Hi Grammy, lets say your bank is paying you $3 every year, but I offer to start paying you $4 every year instead. So, the longer you're locked into the $3 agreement, the shittier the deal with the bank is. If you're stuck with the $3 payment for 15 years, the value of that deal will drop a lot when the $400 payment option is available. If you're only locked in for 1 year, it's not a big deal

Array
 

I got this question a lot too! How i answered it is similar to the one above, i would always say something like "it's how fast you recover your money" - because in a way we are looking at weighted cash flows that are sensitive to interest rates. 

 

Consequatur quia beatae illum ut sequi. Nostrum aut qui est quis. Blanditiis expedita laboriosam facilis consequuntur magni explicabo vitae. Molestiae rem rerum fugit dolorum necessitatibus aut officia.

Career Advancement Opportunities

May 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Lazard Freres No 98.8%
  • Harris Williams & Co. 25 98.3%
  • Goldman Sachs 17 97.7%
  • JPMorgan Chase 04 97.1%

Overall Employee Satisfaction

May 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

May 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

May 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (21) $373
  • Associates (91) $259
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (68) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”