This course focuses on bonds and the bond market. While the cash flows of bonds are specified, their valuation is particularly challenging given interest rate movements, embedded optionality, and credit risk. As part of an examination of structured products, the course will examine the process of creating, valuing, and trading mortgages. Further, the course demonstrates the skills needed to manage fixed income portfolios in light of both client specific objectives and the market environment. Prereq: ADMN 570 or HMGT 655 and ACFI 702 or permission.
Only listed campus in section: Durham
Only listed colleges in section: Paul College of Business&Econ
Only listed majors in section: BUSADM:FINANCE, HOSPITALITY MGT
Additional Course Details:
This course is a rigorous study of a wide range of topics in the fixed income arena. It focuses on securities (mainly bonds) that promise an ongoing and consistent cash flow (hence: “fixed income”) and related securities whose valuations are influenced by interest rates. The course is focused on the concepts and tools that are important to practitioners and investors who want to use these securities, whether for investing, hedging, market making, or speculating. It includes a study of the markets in which these securities trade. While the cash flows of fixed income securities are contractually specified, the valuation of bonds is particularly challenging given interest rate movements, credit risk, and embedded optionality. Additionally, as part of an examination of structured products, the course will examine real estate finance, particularly the process of creating, valuing, and trading mortgages. Further, the course acknowledges that much of the controversy regarding the 2008 Financial Crisis has been directed at the mortgage market. Given that, the course takes a deep dive into that period and examines the underlying issues regarding that global crisis.