Students shall be able to do the following:

Knowledge

• Explain the features of different bond types
• Summarize the real world factors that influence the price of bonds
• Describe the difference between spot and forward interest rates
• Describe different risk measures for bonds
• Explain and compare different bond strategies

Skills

• Apply basic mathematical approaches for bond valuation
• Interpret different risk measures of bonds such as duration and convexity
• Implement different bond strategies
• Classify bond strategies with respect to their risk

Competencies

• Evaluate and analyze the inherent risk of bonds
• Apply bond analysis knowledge to solve complex problems in portfolio and risk management
• Analyze investment restrictions and apply suitable bond strategies

Bonds

• Features of a Bond
• Valuation
• Real World Factors

Risk Measures

• Duration
• Convexity

Bond Strategies

• Cash Flow Matching
• Barbell Strategy
• Duration Matching
• Duration-Gap Analysis
• Riding the Yield Curve
• Arbitrage Strategies

Fabozzi: Bond Markets, Analysis and Strategies, Prentice Hall International

Bodie/Kane/Marcus: Investments, McGraw-Hill

Arnold: Corporate Financial Management, Prentice Hall

Ross/Westerfield/Jordan: Fundamentals of Corporate Finance, Irwin McGraw-Hill