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Day 1:
The Debt market and importance of the Market:
- Debt Market
- Equity Market versus Debt
- Primary versus secondary market
- Size and complexity of the bond market
The Time value of Money Revisited:
- The Fisher Effect
- Real versus Nominal
- Present Value
Raising capital through equity or debt:
- Corporate Requirements and Timing
- Market Place Condition
- Nature and needs for funds
Issuers of Debt Instruments:
Bonds and Associated Risk:
- Risk In Fixed Income
- Default
- Counterparty Risk
- Interest Rates
- Reinvestment
- Liquidity
Types of Debt instruments and sectors:
- Bonds
- Notes
- Hybrids
- Securitised
Bond Characteristics:
- Fixed, Floating and Zero
- Par Value
- Maturity
- Interest Rate
- Interest Payments
The Rating of Debt Instruments:
- Moody's & Standards and Poor
- External Research Analysis firms
- Investment Grade versus High Yield Bonds
Structure of an Issue:
- Secured Versus Unsecured
- Senior versus subordinated
- Call ability
Day 2:
Bond Pricing:
- Percentage Values
- Quotations conventions
Yields, spreads and Calculations:
- Yield versus return versus interest
- Nominal Yield
- Current Yield
- Price and Yields
- Yield to maturity
Interest Rate Risk, Duration and Immunisation:
- Definition
- Calculation
- Interpretation
- Limitations / advantages
- Convexity
- Immunisation.
Day 3:
Constructing a Fixed Income Portfolio:
- Advantages for Individuals (Bonds versus Bond Funds)
- Advantages for Institutions (Active versus Passive strategies)
Risk Continued:
- Reinvestment Risk
- Inflation Risk
- Call Risk
- Interest Rate Risk
- Sector Risk
- Liquidity Risk
- Event Risk
- Sovereign Risk
Types of Diversification:
- By Sector
- By Quality
- By Maturity or Duration
Some trading strategies:
- Bullet, barbell and ladder strategies
- Butterfly strategy
- Trading on market inefficiencies
- Identifying mis-priced bonds
Risk Management and Derivatives:
- Types of Derivatives
- Derivatives as Natural Hedges
- Hedging versus Speculation
- Some Key Hedging strategies and Examples
- Interest Rate Risk and Swaps
- Default Risk and CDS
Bringing it all Together:
- The Art of the Portfolio Manager
- Importance of Asset Allocation
- Asset and Liability Management (ALM)
Introduction to International Bonds:
- Foreign Government Markets
- Foreign Domestic
- Euro Bonds
- Benchmarks and Credit spreads
- Credit and Currency arbitrage via Swaps
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