DEBT SECURITIES

FIN5DBS

2018

Credit points: 15

Subject outline

In this subject, you will develop a working knowledge of the characteristics of fixed income securities, the operation of debt markets and the mechanics of trading these securities. You will also develop a thorough knowledge of the measurement of the yield of fixed interest securities, the various relevant yield spread measures and the term structure of interest rates. This will then be used in the valuation of fixed interest securities, including the valuation of bonds with embedded options, structured securities and international bonds. Specific attention will also be given to credit analysis and risk assessment and the measurement of interest rate risk.

SchoolLa Trobe Business School

Credit points15

Subject Co-ordinatorMichael Li

Available to Study Abroad StudentsYes

Subject year levelYear Level 5 - Masters

Exchange StudentsYes

Subject particulars

Subject rules

PrerequisitesN/A

Co-requisitesN/A

Incompatible subjectsN/A

Equivalent subjectsN/A

Special conditionsN/A

Readings

Resource TypeTitleResource RequirementAuthor and YearPublisher
ReadingsFixed income analysisPrescribedBarbara S. Petitt, et, al.3RD EDN., N.J., JOHN WILEY, 2007

Graduate capabilities & intended learning outcomes

01. Compare and contrast the characteristics of various types of fixed income securities and markets;

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

02. Explain in detail the measurement of the yield of fixed income securities and the term structure of interest rates;

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

03. Explain the financial and economic theory on which the valuation of fixed income securities is founded;

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

04. Value fixed income securities and measure interest rate risk;

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

05. Apply economic and financial theory to credit analysis for a pubic listed company.

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Personal and Professional Skills (Teamwork including leadership and working in groups,Autonomy and independence,Adaptability Skills,Study and Learning Skills)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

Subject options

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Start date between: and    Key dates

Melbourne, 2018, Semester 1, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorMichael Li

Class requirements

Lecture Week: 10 - 22
One 2.0 hours lecture per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Tutorial Week: 10 - 22
One 1.0 hours tutorial per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
four 30-35 minute tutorial assessment tasksThis is an individual assessment20 01, 02, 03, 04
one 3-hour final examinationMCQ questions plus problem solving questions60 01, 02, 03, 04
one 5,000-word group assignment1,000-words per student, a group assignment up to five students per group20 05

Melbourne, 2018, Semester 2, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorMichael Li

Class requirements

Lecture Week: 31 - 43
One 2.0 hours lecture other recurrence on weekdays during the day from week 31 to week 43 and delivered via face-to-face.

Tutorial Week: 31 - 43
One 1.0 hours tutorial other recurrence on weekdays at night from week 31 to week 43 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
four 30-35 minute tutorial assessment tasksThis is an individual assessment20 01, 02, 03, 04
one 3-hour final examinationMCQ questions plus problem solving questions60 01, 02, 03, 04
one 5,000-word group assignment1,000-words per student, a group assignment up to five students per group20 05