What Will I Learn
When you are done with this course, you will be able to:
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Curriculum
Introduction to Fixed-Income Securities
- Basic features of a fixed income security
- Bond indenture
- Affirmative and negative covenants
- How legal, regulatory and tax considerations affect the issuance and trading of fixed income securities
- How cash flows of fixed income securities are structured
Fixed-Income Markets- Issuance, Trading & Funding– I
- Global fixed-income markets
- Use of interbank offered rates as reference rates in floating-rate debt
- Mechanism available for issuing bonds in primary markets
- Secondary markets for bonds
- Securities issued by sovereign governments
- Securities issued by non-sovereign governments, quasi government entities and supranational agencies
- Types of debt issued by corporations
- Structured financial instruments
- Repurchase agreements (repos) and the risks associated with them
Fixed-Income Valuation- I
- Calculate a bond’s price given a market discount rate
- Identify the relationship among a bond’s price, coupon rate, maturity and market discount rate (yield-to-maturity)
- Spot rates and their calculation
- Flat price, accrued interest and the full price of a bond
- Matrix Pricing
- Operating and Non-operating components of the income statement
- Calculate and interpret yield measures for fixed rate bonds, floating-rate notes and money market instruments
- Spot curve, yield curve on coupon bonds, par curve, and forward curve
- Calculate spot rates from forward rates, forward rates from spot rates and the price of bond using forward rates
- Yield spread measures
Asset Backed Securities- I
- Benefits of securitization for economies and financial markets
- Typical structure of securitization, including credit tranching and time tranching
- Residential mortgage loans that are typically securitized
- Residential mortgage backed securities and collateralized mortgage obligations, cash flow and risk of each type
- Pre-payment risk of mortgage-backed securities
- Commercial mortgage-backed securities
- Non-mortgage asset- backed securities
- Collateralized debt obligation, including their cash flows and risks
Understanding Fixed Income Risk and Return- I
- The sources of return from investing in a fixed rate bond
- Macaulay, modified and effective durations
- Uses of key rate duration in measuring the sensitivity of bonds to changes in the shape of the benchmark yield curve
- Bond maturity, coupon and yield level affect its interest rate risk
- Duration and limitation of a portfolio
Understanding Fixed Income Risk and Return- II
- Calculate the money duration of a bond and price value of a basis point (PVBP)
- Approximate and effective convexity
- Effect of term structure of yield volatility on the interest rate risk of a bond
- How changes in credit spread and liquidity affect yield-to-maturity of a bond
- How duration and convexity can be used to estimate the price effect of the changes
Fundamentals Of Credit Analysis
- Credit risk and credit-related risks affecting corporate bonds
- Default probability and loss severity as components of credit risks
- Seniority rankings of corporate debt
- The potential violation of the priority of claims in a bankruptcy proceedings
- Risks in relying on ratings from credit rating agencies
- Four Cs of traditional credit analysis
- Financial ratios used in credit analysis
- Factors influencing the level and volatility of yield spreads
- Special consid erations when evaluating the credit of high yield, sovereign and non- sovereign government debt issuers and issues
How It works
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Live Online Sessions Each session is interactive and informative, featuring case studies, quizzes and projects |
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