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Unit of study_

FINC6014: Fixed Income Securities

This unit covers the concepts required for investment in fixed income securities, managing bond portfolios and understanding debt markets. Topics covered include duration, convexity, interest rate risk, bond volatility and the term structure of interest rates. The more complex types of debt securities studied include mortgage backed securities, corporate bonds with embedded options such as convertible bonds and interest rate derivatives.

Code FINC6014
Academic unit Finance
Credit points 6
Prerequisites:
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FINC5001
Corequisites:
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None
Prohibitions:
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None

At the completion of this unit, you should be able to:

  • LO1. Describe the operations in money and bond markets and appraise the more recent developments in these markets.
  • LO2. Calculate bond prices and yields and calculate and interpret the Macaulay duration, modified duration, dollar duration, and convexity of a bond.
  • LO3. Explain the impact of inflation, liquidity and segmentation on the slope of the yield curve and the predictive content of the yield curve for future economic growth.
  • LO4. Structure and manage a diversified fixed income portfolio.
  • LO5. Evaluate interest rate risk management techniques.