Fixed Interest Investment
| Code | School | Level | Credits | Semesters |
| BUSI4446 | Business | 4 | 20 | Spring UK |
- Code
- BUSI4446
- School
- Business
- Level
- 4
- Credits
- 20
- Semesters
- Spring UK
Summary
Institutional framework of international and UK bond markets. Bond yield and pricing models. Spot and forward interest rate determination. Measuring interest rate risk of bonds. Pricing of Interest rate derivatives. Role of credit rating agencies and the determination of credit ratings. Measuring credit risk. Bond market strategies.
Target Students
Only available for MSc Finance & Investment students AND MSc Exchange students.
Classes
- One 1-hour tutorial each week for 4 weeks
- One 3-hour lecture each week for 11 weeks
The Total Contact Hours will be 44 hours. The remaining 156 hours will be made up of independent study (40 hours lecture preparation, 34 hours coursework preparation, 12 hours seminar preparation, 70 hours exam preparation)
Assessment
- 100% Take home exam (24-hour): Take home exam.
Assessed by end of spring semester
Educational Aims
To give students a sound and up-to-date understanding of fixed-interest securities and the management of fixed-interest portfolios. An understanding of the determination of bond prices, spot rates and forward rates. To develop students' ability to carry out relevant bond pricing and interest rate calculations with confidence. Valuation of interest rate forwards, futures and swaps.Evaluation of the theories of the term structure of interest rates. Measuring interest rate risk using measures such as duration and convexity.An understanding of the role of credit rating agencies and the factors that determine a credit rating.To inculcate an awareness of the richness of the subject, going beyond traditional bond theory to cover fixed-interest derivatives, value-at-risk, and recent credit risk modelling techniques.Learning Outcomes
Knowledge and understanding: This module develops a knowledge and understanding of:
- Finance - the sources, uses and management of finance
Intellectual Skills: This module develops:
- Being able to think critically and be creative: manage the creative processes in self and others; organise thoughts, analyse, synthesise and critically appraise. This includes the capability to identify assumptions, evaluate statements in terms of evidence, detect false logic or reasoning, identify implicit values, define terms adequately and generalise appropriately
- Being able to solve complex problems and make decisions: establish criteria, using appropriate decision-making techniques including identifying, formulating and solving business problems; and the ability to create, identify and evaluate options; the ability to implement and review decisions
- Using information and knowledge effectively in order to abstract meaning from information and to share knowledge, including the use of quantitative skills
Professional Practical Skills: This module develops:
- The ability to conduct research and enquiry into business and management issues either individually or as part of a team through research design, the collection and analysis of quantitative data, synthesis and reporting
- Effective performance within team environments and the ability to recognise and utilise individuals' contributions in group processes and to negotiate and persuade or influence others; team selection, delegation, development and management.
- Leadership and performance management: selecting appropriate leadership style for different situations; setting objectives, motivating, monitoring performance, coaching and mentoring
Transferable (key) Skills: This module develops:
- Effective communication: networking, listening, oral and written communication of complex ideas and arguments, using a range of media, including the preparation of business reports
- High personal effectiveness: critical self-awareness, self-reflection and self-management; time management; conflict resolution, displaying commercial acumen, the ability to continue to learn through reflection on practice and experience
- Soft skills: understanding the needs of others and empathy towards them; sensitivity to diversity in people and in different situations