Deutsche Bank Senior Analyst Interview Questions, Process, and Tips

Duration and convexity are measures used in fixed income investing to assess the sensitivity of bond prices to changes in interest rates.

• Duration measures the sensitivity of a bond's price to changes in interest rates. It is a weighted average of the times until each cash flow is received, with weights proportional to the present value of the cash flow.

• Convexity measures the curvature of the price-yield relationship of...read more

Paying a fixed amount does not determine if you are long or short risk.

• Paying a fixed amount does not indicate the direction of the risk.

• Being long or short risk depends on the specific investment or position taken.

• For example, buying a stock is considered long risk, while short selling a stock is short risk.

Bootstrapping is a statistical technique for estimating the sampling distribution of a statistic by resampling with replacement.

• Bootstrapping involves repeatedly sampling with replacement from the original data set to create multiple 'bootstrap samples'.

• The curve in bootstrapping is built by plotting the distribution of the statistic of interest from the bootstrap samples.

• It helps in estimating the variability and unce...read more

A CDS is valued based on its credit spread, risk-free rate, and time to maturity.

• The value of a CDS is determined by the credit spread, which represents the difference in interest rates between the CDS and a risk-free bond.

• The risk-free rate is also a factor in valuing a CDS, as it represents the opportunity cost of investing in a risk-free asset instead of the CDS.

• The time to maturity of the CDS is another important f...read more