Understanding Fixed Income Markets: Bonds | Yields | Pricing

Demystify fixed income markets with insights into bonds, yields, pricing, and interest rate dynamics.

What you'll learn
Core concepts of fixed income securities and markets.
Calculation of bond yields, pricing, and returns.
Relationship between yields, prices, and market dynamics.
Practical applications of interest rate theories and term structures.

Requirements
Basic knowledge of finance and economics.
Familiarity with mathematical concepts is an advantage.

Description
Course IntroductionThis course offers a deep dive into fixed income markets, exploring the essentials of bonds, money markets, yield relationships, and pricing strategies. With practical examples and theoretical insights, students will understand the intricacies of discounted instruments, term structures, and rate-of-return calculations. Perfect for finance professionals, students, and enthusiasts looking to build expertise in the fixed income domain.Section-Wise Curriculum OverviewSection 1: IntroductionKickstart your journey by understanding the basics of fixed income and its market significance.Lecture 1: Overview of Fixed Income Course (Preview enabled)Introduction to the structure and goals of the course.Lecture 2: Introduction to Fixed Income (Preview enabled)Basics of fixed income securities and their role in the financial ecosystem.Lecture 3: What is Fixed Income Market (Preview enabled)Insights into the fixed income market, its participants, and its dynamics.Section 2: Types of BondsExplore the diverse world of bonds and their yield calculations.Lecture 4: Types of BondsOverview of various bond types, including government, corporate, and municipal bonds.Lecture 5: Types of Yield and ReturnsDifferent yield measures and how they reflect returns on bonds.Section 3: Money Market and Price RelationshipUnderstand short-term debt instruments and the connection between yields and prices.Lecture 6: Money MarketIntroduction to money market instruments and their importance in liquidity management.Lecture 7: Certificate of DepositsCharacteristics and applications of certificates of deposit.Lecture 8: Yield and Price RelationshipHow yields and bond prices are interrelated and affected by market movements.Section 4: Formula ConvexityLearn about convexity and its role in measuring bond price sensitivity.Lecture 9: Formula ConvexityIntroduction to the concept and formula of convexity.Lecture 10: Formula Convexity ContinuesAdvanced applications and calculations involving convexity.Section 5: Cash Flow of a BondExamine the cash flows of bonds and understand critical measures like DVO1 and XIRR.Lecture 11: Convexity and DVO1 of BondRelationship between convexity and duration value of a basis point.Lecture 12: M Duration and PVO1 of BondExploring modified duration and price value of a basis point.Lecture 13-15: Cash Flow of a Bond and ExamplesCalculation and analysis of bond cash flows with XIRR.Lecture 16-17: Day Count ConventionHow day count conventions impact bond valuation and interest calculations.Section 6: Discounted Instrument PricingMaster pricing techniques for discounted instruments and accrued interest.Lecture 18: Zero Coupon InstrumentUnderstanding zero-coupon bonds and their pricing.Lecture 19-20: Discounted Instrument and Yield ExamplesCalculating discounted yields and returns.Lecture 21: Accrued Interest and Purchase PricePractical examples of accrued interest calculations.Lecture 22-24: Discounted Pricing and Trade Output ExamplesComprehensive exercises to solidify pricing concepts.Section 7: Rate of ReturnsLearn to calculate returns, including yield-to-maturity (YTM) and IRR.Lecture 25-26: Accrued InterestDetailed methods for determining accrued interest on bonds.Lecture 27: Yield to MaturityIntroduction to YTM and its importance in fixed income analysis.Lecture 28-30: Formula of Price, IRR, and MIRRDetailed calculations for price determination, internal rate of return, and modified IRR.Section 8: Term Structure of Interest RatesAnalyze interest rate structures, spot rates, and forward rates.Lecture 32: Structure of Interest Rate and Spot RateUnderstanding how interest rates evolve over time.Lecture 33-34: Zero Coupon Rates VS YTMComparing zero-coupon rates with yield-to-maturity.Lecture 35-36: Forward Rates and ExamplesCalculation and application of forward rates.Lecture 37-38: Liquidity Preference and Market DynamicsTheories explaining term structures and how market dynamics influence interest rates.ConclusionBy completing this course, you'll have a robust understanding of fixed income instruments, pricing mechanisms, and the critical role of interest rates, enabling you to make informed decisions in the fixed income markets.

Who this course is for
Finance professionals seeking expertise in fixed income.
Students and analysts preparing for careers in bond markets.
Investors interested in understanding fixed income strategies.