Fixed Income and Debt Markets

Overview

The unit provides students with knowledge of fixed income and debt markets, securities and the relationship to interest rates, especially for corporations and governments. It will cover the quantitative techniques in valuing a variety of fixed income securities, including bonds with options and structured products. There will be analysing of credit and interest risk and performance of fixed income products, especially in light of current and historical economic uncertainties. The ethical issues surrounding investing in fixed income securities will be discussed and applications of financial technology in these markets will be explored.

Unit learning outcomes

Students who successfully complete this unit will be able to:

1. Analyse the characteristics of fixed income securities, debt markets, and valuation techniques
2. Evaluate and manage the risks and consequences associated with fixed income securities and debt distress
3. Critically assess ethical and technological issues relating to fixed income security structuring, issuance, and investing across different markets
4. Work effectively in teams within a complex environment by exhibiting interpersonal, communication, and organisational skills.

Teaching methods

Hawthorn

Assessment

Content

• Types of fixed income securities and their characteristics
• Fixed income and debt markets
• Fixed income valuation and return analysis
• Term structure determination and yield spreads
• Interest rate risk and credit risk analysis
• Valuing bonds and embedded options
• Structured products
• Ethics in investing in fixed income securities
• FinTech advances with the fixed income market