Fixed Income Markets I
Gain a comprehensive overview of the fixed income market, covering basic bond terminology, fundamentals, yield calculations and the specifics of corporate, government and municipal bonds.
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Module 1: Size and importance of the bond market
- Debt market
- Equity market
Module 2: Major debt market categories
- Money markets
- Capital markets
Module 3: Choice of equity or debt for capital formation
- Condition of the company
- Condition of the market place
- Nature of the need for funds
Module 4: Tax advantages/disadvantages
- Loss of financial flexibility through leverage
- Deduct interest payments
- Dividends paid from after-tax income
- Regulatory restraints on bank lending
Module 5: Issuers
- Foreign governments and firms
- Domestic corporations
- Municipal governments
- Federal governments and its agencies
Module 6: Bond fundamentals
- Par value
- Maturity
- Interest rate
- Interest payment
Module 7: Bond pricing
- Percentage values
- Quotation conventions
- Converting prices to dollar amounts
- Premium price
Module 8: Accrued interest
- Standard payment dates
- Trade date and settlement date
- Different market conventions for treasuries
- Calculation
Module 9: Yield calculations
- Yield vs. return vs. interest rate
- Nominal yield
- Current yield
- Real yields
- Price and yield
- Yield to maturity
Module 10: Duration Analysis - Introduction
- Definition
- Calculation - explained
- Interpretation
- Limitations/advantages
Module 11: Risks in the market
- Reinvestment risk
- Inflation risk
- Call risk
- Interest rate risk
- Sector risk
- Liquidity risk
- Event risk
- Sovereign risk
Module 12: Credit/investments risk
- Credit risk vs. market risk
- Market performance: a function of rating
Module 13: The rating services
- Moody's
- Standard & Poor's
- Fitch Investor's Services
- External research analysis firms
- Research departments
Module 14: Structure of an issue
- Secured vs. unsecured bond
- Senior vs. subordinated bond
- Callability
- Structure of the call feature
- Sinking fund
- The indenture
- Notes vs. bonds
- Serial borrowing
- Term borrowing
- Bullets
- Basic elements - rate, time, principal return
Module 15: The money markets
- Types of issuers
- Issued as discount
- Less than one year maturities
Module 16: Key interest rates
- Discount rate
- Fed funds rate
Module 1: U.S. government securities & agency issues
- Types of issues
- Primary government security dealers
- The treasury auction
- The secondary market
- The Government securities yield curve
Module 2: The corporate bond markets
- Types of issuers
- Utility; transportation; financial; telecommunication; industrial
Module 3: Municipal securities
- Definition
- Taxation
- Types of issuers
- Credit risk and credit ratings
- The secondary market
Module 4: Mortgage securities
- Traditional mortgage
- Government agencies
- Lenders
- Borrowers
- CMOs
Module 5: Other asset backed securities
- Credit cards
- Auto loans
- Student loans
- Corporate debt
Module 6: Yield curves
- Definition of yield curve
- Determinants of shape of yield curve
- Shape of yield curve and market expectations
- Spreads between yield curves
Module 7: The economy
- Business cycles
- Monthly indicators
- Watching the Fed
Module 8: Fiscal policy
- Monetary policy
- Concept of reserves - money creation
- Transmission process to the economy
- Key interest rates
- Impact on security yields
- Role of the Federal Reserve in the American economy
Module 9: Structure of the Federal Reserve
- Board of Governors
- The FOMC
- 12 Federal Reserve Banks
Module 10: Targets and Goals
- Reserve management
- Short run targets - reserves and rates
- Intermediate targets - money supply
- Final goals - credit flows and the economy
Module 11: Tools of the Fed
- Reserve requirements
- Discount rates
- Open market operations
- Margin requirements
Module 12: Role of the New York Fed
- Demand and supply for reserves
- Operations
- Primary Reporting Dealers
Module 13: The Federal funds market
- Importance of Federal funds
- Defined as a security
- Methods of Federal funds exchange