INTERVIEW QUESTIONS: Mitsubishi UFJ, fixed income trading, graduate position
QUESTION:
What are the risks associated with owning a bond?
ANSWER GIVEN:
Interest rate risk, counterpart risk, liquidity risk.
QUESTION:
How do you hedge interest rate risk on a bond?
ANSWER GIVEN:
Enter into an interest rate swap, short treasuries if long bond.
QUESTION:
How does liquidity affect the bid-offer spread on a bond?
ANSWER GIVEN:
The more illiquid the bond, the wider the bid-offer spread.
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We cannot guarantee the authenticity of these questions nor the accuracy of the answers: they are what one candidate claims to have been asked by Mitsubishi UFJ and have not been verified by the bank.
