The purpose of this course is to examine the structure and architecture of markets and debt securities, as well as the analysis and management tools for fixed income securities portfolios. In particular, pricing of bonds, interest risk management and credit management, design and use of credit derivatives and synthetic instruments are discussed. Debt markets and the fixed income securities that are traded in them play an extremely important role as they have a much greater value than share investments on a global level and are the basis for a range of other synthetic or derivative financial instruments.

The purpose of this course is to examine the structure and architecture of markets and debt securities, as well as the analysis and management tools for fixed income securities portfolios.

On successful completion of the course students will have knowledge of:

• the basic characteristics of current fixed income securities;
• the way in which they are used as investments or to generate profit;
• bond pricing issues;
• the management of interest risk and credit risk; and
• design and use of credit derivatives instruments.

On successful completion of the course students will be able to:

• calculate bond return;
• calculate bond risk;
• assess the effect of fluctuation of interest rates on the price of a bond; and
• examine the effect of credit risk on bond return.