BUU33620 Intro to Fixed-Income Securities and Alternative Investments

(5 ECTS)

Lecturer(s):

Aleksandar Sevic

Email: a.sevic@tcd.ie 
Office Hours: TBA

Course Tutor: TBA

Email: TBA

Pre-Requisite

The pre-requisite for this module is BUU22550 Introduction to Finance or equivalent. Possessing some basic skills in Corporate Finance will assist you. Additional requirements is a familiarity with and ease of interaction with numerical concepts. Competence with statistical concepts such as multiple regression analysis and basic algebra is also useful.

Available to Exchange students

Module Description

How to calculate the value of various bonds? What is duration and convexity and how can we use these concepts? Is there a difference between commercial and non-commercial fixed income securities? What is the depth of the international bond market? What is the reason in creating asset backed securities? What is the importance of derivatives in financial industries? Various commodities could be traded and there are some specifics in these trades as opposed to trades in financial assets.

These commonly asked financial questions form the core issues that we will address in this course. In the course we will be concerned both with the practice and theory of managerial decision making in relation to these and related questions.

Much of this course is related to material that would typically be covered in the Chartered Financial Analyst examination at Level I and Level II for the corporate finance area. The CFA is a professional, graduate level, qualification. It is eminently suited to those who are interested in financial analysis, fund management, equity analysis, financial research etc. Details of the qualification and the CFA institute can be found at their website, www.cfainstitute.org. CFA candidates take three levels of examinations. The required skills etc on which they are examined are contained in the CFA Body of Knowledge. However, please note that this course is independent of and not associated with the CFA Institute.

Learning & Teaching Approach

We tend to use Bloom’s taxonomy of learning goals, which suggests that learning most effectively works from simple facts through more complicated applications. For some more information on this please see, for instance, http://www.nwlink.com/~donclark/hrd/bloom.html. Note also that we are primarily working here in the Cognitive domain.

Lectures will be provided online and are designed to provide overview and outline of the main areas and concepts of the topic under discussion. This will generally be with the aid of PowerPoint slides, the basis for which are the slides accompanying the text. However, it is highly probable that we will add to and deviate from these slides in order to better illustrate and contextualize the material as the instructors see it. Nor do we guarantee in each lecture to cover all the material that we have on the slides. The slides then are an outline, not a complete coverage. We encourage you to consider these slides as we do – a framework, not a straightjacket.  The ideal way to approach the topic of the day is by your having read the relevant chapters of the text and taken notes on the issues you find of interest and/or which trouble you. Lectures will then provide an overview of the area. It should not be necessary to take detailed notes in class.  Indeed, the instructor would rather that you did not, concentrating on the flow of the material and on issues of concern to you we will also supplement the lectures with real world vignettes and illustrations and we urge you to find your own examples of these topics and to post them on the website for the course. 

In the tutorials additional assignments will be worked through and ‘ideal’ solutions provided to them. The tutorials will also provide you with an opportunity to query the material in the course. Tutorial attendance is compulsory.

Learning Outcomes

On successful completion of this course, students will be able to:

• Explore various types of fixed-income securities.
• Apply portfolio concepts in fixed income securities’ management.
• Demonstrate flexibility, adapatabilty and independence in order to engage productively with a changing social, cultural and technological environment.
• Find journal and other material on the library local page using the online databases.
• Apply business, fixed income securities’ management, financial statement and investment logic to address issues of this module.
• Work effectively as an individual and in teams in multi-disciplinary and multi-cultural settings.
• Examine derivatives and commodity market.

Relation to Degree

This module supports a number of the learning outcomes of the Global Business degree programme. Specifically, it supports students achieving the overall programme learning outcomes by enabling them to:

• Identify, critically evaluate and synthesise the substantive theories, frameworks and models, both qualitative and quantitative, that are used in fields of enquiry related to business, management and the social sciences.
• Analyse and solve a variety of problems in the private and public sectors from a multi-disciplinary knowledge basis of theories, tools and techniques in business and the social sciences.
• Communicate effectively in oral and written modes in professional and academic settings.
• Work effectively as an individual and in teams in multi-disciplinary and multi-cultural settings.
• Demonstrate flexibilty, adaptabilty and independence in order to engage productively with a changing social, cultural and technological environment.
• Students will be equipped with the tools necessary to pursue knowledge in greater depth and over time, either as a practitioner or an academic.

Special instructions for students attending for only part of the academic year (SOCRATES etc):

While you are most welcome and encouraged to consider taking this course, please note that it is at present designed as a half-a-year course. All exchange students are required to attend the final examination or submit assignments at the end of Semester I. Alternative assessment items (as a replacement for the final examination) will not be provided.

Recommended Texts/Key Reading

We strongly recommend that you purchase either one of these textbooks:

Frank J. Fabozzi (2010), Bond Markets, Analysis and Strategies, 7th Edition, Pearson Prentice Hall, Upper Saddle River, New Jersey, ISBN: 978-0-13-609974-1
or
Frank J. Fabozzi (2013), Bond Markets, Analysis and Strategies, 8th Edition, Pearson Prentice Hall, Upper Saddle River, New Jersey, ISBN: 978-0-273-76613-1

Assessment

There are a number of assessments. Please remember that the examination covers the entire course.

Reassessment

Students who fail the final examination could be allowed to re-attend the examination during the following examination period. Students must complete group assignments by acting as a member of a team. It is not possible to complete individual assignments.