Fixed Income Research Associate interview questions

I have an upcoming phone interview with an Investment Officer for a  fixed income research position. I am still in college, and it’s an entry level role, but I’m curious as to what questions I should expect ( I  know basic things like Duration, Convexity, Interest rate impact, ect). I had previously worked at this firm as a co-op for 6 months in another department. I have a couple of positive internal references from my former manager and a senior colleague if that changes the interview style. I guess I’m just asking if it will be more behavioral or technical. 

 

Ah, swinging from the trees of knowledge, I see! Preparing for a fixed income research interview, are you? Well, let me peel a banana of wisdom for you. Based on the most helpful WSO content, here's what you might expect in your interview:

  1. Technical Questions: Since you're familiar with concepts like Duration, Convexity, and the impact of interest rates, you're off to a good start. You might be asked to:

    • Explain these concepts in simple terms.
    • Discuss how changes in interest rates affect bond prices.
    • Calculate the duration or convexity of a bond given certain parameters.
    • Analyze a bond's yield curve and discuss what it indicates about market expectations.
  2. Behavioral Questions: Given your previous co-op experience at the firm, they already know you're a cultural fit, which is a huge plus. Expect questions like:

    • Describe a challenging situation you faced during your co-op and how you handled it.
    • Discuss a time when you had to work with a team to achieve a goal.
    • Explain why you're interested in fixed income research and how your past experience has prepared you for this role.
  3. Internal References: Having internal references can indeed change the interview style. It might lean more towards understanding your motivations, work ethic, and how you've applied what you've learned in your previous role to this new opportunity.

  4. Firm-Specific Knowledge: Be prepared to talk about why you want to return to the firm, what you enjoyed about your co-op, and how you see your career progressing there.

Remember, every banana in the bunch is different, so while you can anticipate these types of questions, be ready for a curveball or two. And don't forget to brush up on the firm's recent fixed income research publications to show that you're not just monkeying around – you're serious about this gig! Good luck!

Sources: Interview with an Equity Research Associate (Part 1/2), Q&A: Credit Research Associate interview, What should I expect for virtual investment research internship?, Interview - Real Estate Investment Banking Analyst, Q&A: Fixed Income Strategy & Research @ large NY based (global) firm

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It's hard to say what to expect, but most applicants are ready with their main talking points and then try to get them in. You should absolutely know bond math, and be ready to demonstrate that to a degree.  But with the math stuff, if you sound like you know what you're talking about to the level expected for the role, the conversation will probably move on. Interviewers don't want to sit there and grill you on elementary concepts, they want to see where you're at in your capabilities. I'd probably save them some time, and when it comes up say, "I know x and y, but I haven't had a chance to get exposure to z yet. I think that with access to the resources at this firm, I could get that down pretty quickly, and move on to working on q, which is where I think I could really contribute." A research analyst should be resourceful. Relationships are as important as technical knowledge. You're not gonna figure it all out on a spreadsheet in a skunkworks somewhere. You need to know how to get information and stay on top of trends. There's a million people who studied stochastic calculus, but that doesn't actually come up a whole lot unless you're running a quant strategy. So talk about ways to figure things out, how to find interesting ideas and opportunities. It wouldn't hurt to mention a few ideas. I'd look for stuff an area they could invest in, but that is pretty esoteric and unlikely anyone is really looking at. Maybe something that requires specialized knowledge in a small sector where no one is bothering to do the research, for lack of ability to do big trades. Good luck.

If you do pitch an idea, one thing not to do is develop or share any non-public information. That will seriously piss off any decent investor who will then have deal with a bunch of compliance headaches.

 

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