FIXED INCOME ANALYSIS

FIXED INCOME ANALYSIS udemy course free download

Bond pricing and yield measures | Spot, par and forward yield curves | Interest rate risk and return

The course aims at covering the foundational elements of fixed rate bonds, particularly regarding the interpretation of the return and risk trade-offs with reference to yield-to-maturity and duration. The first lessons give on overview of the fixed income markets, the kind of securities that are traded, the type of issuers that rely on the bond markets to fund their operations. The type of different cash flows that a bond can feature (i.e. bullet bonds, zero-coupon bonds, floating rate bonds).

After a brief introduction about fixed-income securities and their markets, the bulk of the course revolves around (1) fixed-income valuation covering the application of discounted cash flow analysis in bond pricing, the interpretation and calculation of yield-to-maturity, the different quote conventions and meanings of ‘flat’ and ‘full’ prices, the effects of maturity, coupon, yield and convexity on bond prices (or yields), (2) yield and yield spread measures regarding the computation of effective annual rates for adjusting for different periodicities, the different measures of yields for bonds with embedded options, G-spread, I-spread and Z-spread and spreads for floating rate bonds, (3) spot, par and forward rates, the yield curve, pricing with spot rates, par and forward rates and the spot, par and forward curves, (4) interest rate risk and return, a bond’s sources of return, the holding period and interest rate risk, Macaulay duration, modified duration, money duration and the price value of a basis point, bond convexity and the approximate change using both duration and convexity.