FIXED INCOME SECURITIES – ANALYSIS AND VALUATION


Programme:                 FIXED INCOME SECURITIES – ANALYSIS AND VALUATION

COURSE LEARNING OUTCOMES:

•  Conceptual, Analytical and Practical inputs of understanding bond mathematics

•  Understand the bond market, the pricing, rates, interest structure and risks of various bonds

•  Understand interest rate risk management concepts

•  Determine whether bonds are cheap or expensive

COURSE CONTENT:

Day 1:-

Introduction to Fixed Income Securities

Bonds distinguished from Equities

Types of Fixed Income Securities

:- By Coupons, Maturity, Issuer, Seniority, Ratings, Optional Features etc.

 

Valuation of Fixed Income Securities (Bonds)

Bond Price and Yield Calculations

:- Yield to Maturity (YTM), Yield to Call (YTC), Actual Realized Yield,   Current/Running Yield

:- BEY and EAY concepts

:- Portfolio Yield

:- Clean and Dirty pricing

:- Credit Spreads (including Z spread and Options Adjusted Spread)

Relationships between Price, Coupon, YTM and Maturity

Day 2:-

YTM vs. Spot Rates vs. Forward Rates;  and Bootstrapping

Bond Price Sensitivity

:- Concept of Duration and Convexity

:- Macaulay, Modified (with Dollar Duration, PV01) and Effective Duration; and Portfolio Management

:- Hedge ratios

Yield Curve and Term Structure Of Interest Rates

Factors explaining various Shapes of Yield Curves (Flattening, Steepening, Inverted, Humped)

Theories Of The Term Structure Of Interest Rates

:- Pure Expectation, Liquidity Preference, Market Segmentation and Preferred Habitat Hypothesis

Shifts of Yield Curve and Portfolio Management

:- Parallel vs. Non Parallel

Risks in Bond Investment

:- Interest Rate Risk, Reinvestment Risk, Liquidity Risk, Sovereign Risk, Credit Risk etc.

 
     

Training Methodology:

 

• Highly interactive, with application of extensive excel based case studies and real life examples

• Emphasis on participants gaining practical and hands-on experience