Fixed Income Masterclass


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  • Level: Intermediate to Advanced
  • 14 CPE Credits
  • Group-Live
  • Prerequisite: none
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  • US $1,695
  • Group discounts available

INSTRUCTOR

Douglas C. Carroll    Read bio

course description

The Fixed Income Master Class is designed to deepen and extend the discussion of credit market-related topics introduced in the Fixed Income 101 class. Several key topics and concepts introduced there will be explored in greater detail and discussed from the perspective of market participants, in particular, how these issues are employed in assessing fixed income investing, trading, market relative values and risks. The goal is to provide participants with better insight into the operation of important aspects of the debt securities markets as well as a more integrated understanding of how the various elements of these markets interact with one another.

Course outline

Session One:  Interest Rates, Bond Pricing and Yield Conventions

By the end of the session, participants will be able to:

  • Discuss interest rates
    • What is an interest rate?
    • The price of money or the price of credit
    • Interest rates, bond yields and rates of return
  • Analyze bond prices and yields
    • Yield to Maturity vs. realized rates of return
    • Bond yields as an expression of current value
    • Bond yield insight – cost today per dollar of future cash flow

Session Two:  Issues of Securities

By the end of the session, participants will be able to:

  • Identify Yield Auctions
    • Types of yield auctions
    • Auction process
    • Auction metrics – bid to cover, average accepted price, stop out  price
  • Discuss Public Offering via Underwriters
    • Firm commitment versus best efforts underwritings
    • Negotiate compared to competitive bid underwritings
    • Types of syndicates – divided or undivided
    • Description of the underwriting processes
  • Identify Exempt Offerings
    • Private placements
    • Rule 144 offerings
  • Price New Issues

Session Three:  Market Pricing of Credit

By the end of the session, participants will be able to:

  • Identify and discuss different Yield Curves
    • Yield curve fundamentals
    • Types of yield curves (security type, issuer or credit sector)
    • Construction of yield curve
  • Appraise Yield Curves, Credit Markets and the Real Economy
    • Level of interest rates and the shape (slope) of the yield curve
    • Credit/issuer sector spreads
    • Yield curve movements and the business (economic) cycle

Session Four:  Measuring and Managing Credit Risk

By the end of the session, participants will be able to:

  • Quantify Credit risk  
    • Credit ratings
    • Credit spreads
    • CDS spreads
  • Rating agencies and credit ratings
    • Credit trends and credit rating transition matrixes
    • Returns and default experience
  • Explain Credit Default Swaps (CDS)
    • CDS Contracts
    • CDS Spreads, cash flows and valuation
    • Managing credit risk with CDS
  • Discuss high yield securities
    • Terms and definitions
    • Evolution of high yield markets
    • Risk and return characteristics

Session Five:  Federal Reserve Policy, Interest Rates and Credit Markets

By the end of the session, participants will be able to:

  • Discuss the Federal Reserve System
    • Structure of the Fed
    • Economic objectives
    • Monetary policy tools
    • Targets as policy guideposts
  • Identify Fed Action, Market Reaction and Real Economy Impacts
    • Fed policy over time
    • Current Fed policy – quantitative easing (QE) and rate guidance

Session Six:  Fixed Income Analytics

By the end of the session, participants will be able to:

  • Quantify and Manage Interest Rate (Price) Risk
    • Duration sensitivity of bond prices/bond portfolio values to rate changes
    • Types of duration – modified, effective and dollar duration
    • Positive and negative convexity
  • Explain and discuss risk management
    • Applications for hedging inventories or trading positions
    • Applications in fixed income portfolio management

Session Seven:  Fixed Income Portfolio Management

By the end of the session, participants will be able to:

  • Discuss portfolio management concepts
    • Investment objective setting:  risk and return
    • Portfolio constraints
    • Measuring and assessing portfolio performance
  • Identify portfolio management styles
    • Managing assets to fund future liabilities
    • Passive investment management – indexing and quasi indexing
    • Active portfolio management – constrained and unconstrained

 

In-house instruction is available.  Contact us to inquire.


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