Overview
The Introduction to Fixed Income training course is an overview of the fixed income securities designed for anyone seeking a solid understanding of fixed income securities and financial markets.
Course Outline
What is Fixed Income Securities?
Types of Fixed Income Securities
– Government Bonds (Billds, Notes, Bonds)
– Corporate Bonds
– Zero Coupon Bonds
– High Yield Bonds
– Medium Term Notes
– Commercial Paper
– Structure Note
– Asset Backed Securities
– Mortgage Backed Securities
Fixed Income vs Equity
– What is Equity
– What is the difference between Fixed Income and Equity
Structure of Fixed Income Market
– Introduction to the Fixed Income Market
– Major players
– How to buy bonds
Basic Features of Bonds
– Maturity
– Par Value
– Coupon Rate
– Currency Denomination
Bond Indenture and Covenants
Legal, Regulatory and Tax Considerations
– International bonds
– Government bonds
– Tax Considerations
Fixed Income Risks
– Interest Rate Risk
– Reinvestment Risk
– Inflation Risk
– Credit/Default Risk
– Rating Downgrades Risk
– Liquidity Risk
– Volatility Risk
– Exchange-rate Risk
– Event Risk
Pricing of the Fixed Income Securities
– How to determine a fair price
– Features of a bond and yield measures
– Basic Calculation of a bond price
Introduction to Fixed Income Valuation
– Bond pricing with a market discount rate
– Relationship between the bond price and bond characteristics
– Pricing Bonds
– Flat Price and Full Price
– Matrix Pricing
– Yield measures for fixed-rate bonds
– Discount Basis yield and Add On Rate
– Maturity structure of interest rates
– Forward rate and Spot rate
– Yield Spreads
Principal Repayment Structures
– Bullet Bond
– Fully Amortised Bond
– Partially Amortised Bond
Coupon Payment Structures
Bonds with Contingency Provisions
– Callable Bond
– Putable Bond
– Convertible Bond
Fixed Income Derivatives
– Credit Default Swaps
– Interest Swaps
– Inflation Swaps
– Bond Futures
– Interest Rate Futures
– Forward Rate Agreements