This module is not currently running in 2024 to 2025.
How do interest rates affect so many aspects of our daily lives? Why are they considered the most complex macro-economic variable? Learn how to untangle that complexity by constructing a range of yield curves. In this way you'll understand the structure and pricing of various fixed income financial products including money-market debt instruments and interest rates derivatives used in hedging interest rate risk.
You'll learn important techniques which will help you to compute the fair prices of numerous financial products such as bonds, certificates of deposit, forward rate agreements and repo contracts, as well as learning how to develop simple mortgage schedules and pension schemes. These are extremely valuable analytical skills that will serve you well towards a career as a financial analyst, pension officer or mortgage adviser.
The module will be taught by lectures, seminars and private study.
Total Contact Hours: 33
Private Study Hours: 117
Main assessment methods
Group Written Report - (2,000 words).
Exam: Two Hours, Unseen: 70%
In order to pass the module as a whole and ensure all learning outcomes are met, students must achieve a pass mark of 40% for the group written report.
Reassessment methods
Reassessment will be 100% examination.
Core Reading
- Fabozzi, F. (2013) Bond Markets, Analysis and Strategies, 8th Edition. London: Prentice Hall.
- Petitt, B. S., Pinto, J.E. and Pirie, W.L. (2015), Fixed income analysis. 3rd Edition, CFA Institute, Hoboken, NJ: John Wiley & Sons.
Recommended Reading
- Arnold, G. (2015). FT Guide to Bond and Money Markets. London: FT Publishing International.
- Fabozzi, F.J. (2007). Fixed Income Analysis. Second Edition. Hoboken, NJ: Wiley.
- Martellini, L., Priaulet, P., & Priaulet, S. (2005). Fixed-income securities: valuation, risk management and portfolio strategies. Hoboken, NJ: Wiley.
- Tuckman, B. and Serrat, A. (2011). Fixed Income Securities: Tools for Today's Markets. 3rd Edition. Hoboken, NJ: Wiley.
See the library reading list for this module (Medway)
The intended subject specific learning outcomes.
On successfully completing the module students will be able to:
- Demonstrate systematic understanding of the operations in money and bond markets and appraise the more recent developments in these markets.
- Demonstrate their ability in calculation and manipulation and capability to deploy accurately established approaches to analyse similarities and differences, and solve problems in various financial areas.
- Critically apply key aspects of Fixed Income Securities in well-defined contexts, showing judgement in the selection and application of tools and techniques.
- Demonstrate conceptual and critical understanding of the advantages and disadvantages of financial approaches in bond valuation and structuring and managing a diversified fixed-income portfolio.
The intended generic learning outcomes.
On successfully completing the module students will be able to:
- Manage their own learning and make use of appropriate resources and demonstrate the acquisition of the study skills needed for continuing professional development.
- Understand and critically evaluate logical arguments, identifying the assumptions made and the conclusions drawn.
- Effectively, communicate information, ideas, and solutions to both specialist and non-specialist audiences.
- Apply advanced IT skills to analyse and solve complex problems
- Work effectively and efficiently within a team
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