Tutorial lessons
MODULE 07 — Fixed Income
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Lessons
Tutorial lessons
FI 1 Fixed-Income Instrument Features
The features that define a bond and the legal contract that governs it. Check-yourself items are study aids. Fixed-Income Instruments and Their Issuers Fixed-income instruments are debt: an issuer bor
FI 2 Fixed-Income Cash Flows and Types
How the timing and size of a bond’s cash flows are set, and the call, put, and conversion features that reshape them. Check-yourself items are study aids. Bullet Bonds and Amortizing Debt The ca
FI 3 Fixed-Income Issuance and Trading
How bond markets are segmented, indexed, and traded, from a first issue through to distressed sales. Check-yourself items are study aids. Fixed-Income Segments, Issuers, and Investors Bonds and the ma
FI 4 Fixed-Income Markets for Corporate Issuers
How corporations and financial institutions raise short-term and long-term debt, from bank lines and commercial paper to repos and the investment-grade versus high-yield divide. Check-yourself items a
FI 5 Fixed-Income Markets for Government Issuers
How public sector issuers raise and trade debt, and how they differ from private issuers. Check-yourself items are study aids. Sovereign Issuers and the Government Balance Sheet Public sector issuers
FI 6 Fixed-Income Bond Valuation: Prices and Yields
How discounted cash flow analysis sets a bond price and its yield, on and between coupon dates. Check-yourself items are study aids. Bond Pricing with a Market Discount Rate Valuing a fixed-rate bond
FI 7 Yield and Yield Spread Measures for Fixed-Rate Bonds
How compounding frequency, embedded options, and benchmark spreads shape the yields quoted on fixed-rate bonds. Check-yourself items are study aids. Yields, Periodicity, and Spreads: An Overview A yie
FI 8 Yield and Yield Spread Measures for Floating-Rate Instruments
Pricing floating-rate notes, reading quoted versus discount margins, and comparing money market instruments on a common basis. Check-yourself items are study aids. Floaters and money market instrument
FI 9 The Term Structure of Interest Rates: Spot, Par, and Forward Curves
Building the spot, par, and forward curves from default-risk-free rates, and pricing bonds with each. Check-yourself items are study aids. The Maturity Structure of Interest Rates and Spot Rates Earli
FI 10 Interest Rate Risk and Return
CFA LEVEL 1 · FIXED INCOME Interest Rate Risk and Return How the three sources of a bond’s return interact, and why holding a bond for its Macaulay duration neutralizes interest rate risk
FI 11 Yield-Based Bond Duration Measures and Properties
How Macaulay, modified, and money duration, plus the price value of a basis point, gauge a bond’s interest rate risk, and how maturity, coupon, and yield shape it. Check-yourself items are study
FI 12 Yield-Based Bond Convexity and Portfolio Properties
CFA LEVEL 1 · FIXED INCOME Yield-Based Bond Convexity and Portfolio Properties How convexity refines duration-based price estimates for single bonds and for portfolios. Check-yourself items are
FI 13 Curve-Based and Empirical Fixed-Income Risk Measures
How effective duration, effective convexity, key rate duration, and the empirical view measure interest rate risk when a bond’s cash flows are uncertain. Check-yourself items are study aids. Cur
FI 14 Credit Risk
How lenders measure the risk of not being repaid, how ratings and yield spreads price that risk, and how spread changes move bond prices. Check-yourself items are study aids. Sources of Credit Risk Cr
FI 15 Credit Analysis for Government Issuers
CFA LEVEL 1 · FIXED INCOME Credit Analysis for Government Issuers How analysts weigh the ability and the willingness of governments to repay their debt. Check-yourself items are study aids. Gov
FI 16 Credit Analysis for Corporate Issuers
How lenders judge a non-financial company’s ability to service its debt, from qualitative business analysis through credit ratios to recovery in default. Check-yourself items are study aids. Qua
FI 17 Fixed-Income Securitization
How pooled loans and receivables become tradable securities, and who does what along the way. Check-yourself items are study aids. What Securitization Is An asset-backed security (ABS) is a security t
FI 18 Asset-Backed Security (ABS) Instrument and Market Features
How covered bonds, non-mortgage ABS, and collateralized debt obligations repackage pooled cash flows into tranches with different risks and returns. Check-yourself items are study aids. Securitization