Fixed-Income Valuation and Risk Analytics • TFA Interview Guide

Fixed-income valuation forms the backbone of modern investments and financial risk management, determining trillions of dollars in daily mark-to-market calculations across global markets. From the 1994 Orange County bankruptcy caused by mispriced interest rate derivatives to the 2023 Silicon Valley Bank collapse triggered by unrealized losses on long-duration bonds, history repeatedly demonstrates that inadequate fixed-income valuation and risk measurement capabilities can destroy institutions overnight. The ability to accurately value, stress-test, and attribute P&L for bond portfolios separates surviving institutions from those that become cautionary tales.

This interview reference is designed to prepare you for technical discussions on fixed-income valuation roles at investment banks, asset management firms, pension funds, insurance companies, and other financial institutions. It covers the fundamental valuation methodologies, sensitivity analysis techniques, and practical implementation challenges that define professional fixed-income portfolio management.

The reference is structured around key topics that frequently appear in interviews:

Note: This is Part 2 of the complete Fixed-Income Investments and Risk Management interview series: TFA Interview Guide: Fixed-Income Investments and Risk Management. For comprehensive coverage, refer to the companion references on Fundamentals of Fixed-Income Markets and Products (Part 1), Interest Rate Risk Measurement and Management (Part 3), and Fixed-Income Derivatives and Structured Products (Part 4).

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