Financial economics 3, fixed income securities, 7.5 Credits

Contents

The course provides coverage of the main types of fixed income securities that exist on financial markets, analytical techniques for valuing these securities, techniques for quantifying their exposure to changes in interest rates, and portfolio strategies for achieving investment objectives.

This course provides an (1) in-depth exploration of fixed income securities, including bonds, money market instruments and other interest rate-based instruments, (2) the analytical techniques for valuing them and quantifying their exposure to interest rate and price risks, (3) portfolio strategies for achieving investment objectives and (4) econometric methods and concepts used to estimate models for fixed income securities.

Students will develop a comprehensive understanding of the features, valuation, risk analysis, econometric analysis and trading strategies associated with fixed income securities. The course will cover relevant theories, models, and market practices.

Expected learning outcomes

Having completed the course the student is expected to be able to:

Knowledge and understanding

• Demonstrate understanding of the characteristics and types of fixed income securities.
• Comprehend the role of fixed income securities in financial markets.
• Assess the relationship between interest rates and bond prices.

Competence and skills

• Apply valuation techniques to determine the fair value of fixed income securities.
• Evaluate and analyze the risks associated with fixed income instruments.
• Develop investment strategies and portfolio management techniques using fixed income securities.

Required Knowledge

90 credits of which at least 7.5 credits in mathematics containing calculus, such as One-dimensional calculus 1 or Mathematical Economics I D7. Proficiency in English equivalent to the Swedish upper secondary course English 6.

Form of instruction

The course is offered in the form of lectures, seminars and exercise sessions.

Examination modes

The examination consists of written group assignments and an individual written hall examination. The results of assignments are valid only during the given semester.

The following grading scale will be used for the course: Pass with Distinction (Väl Godkänd, VG), Pass (Godkänd, G) and Fail (Underkänd, U).

It is normally not possible to do additional examinations to reach a higher grade. Exceptions can be made for a student with the grade Fail on any of the examinations if the examiner (not the lecturer) finds this appropriate. The task must be a minor undertaking, closely related to the learning outcome not reached, and performed in close proximity to the original examination.

A student who does not pass the first examination will be offered an opportunity to sit a re-examination within two months. An additional examination opportunity is normally offered every academic year, one week prior to the start of the autumn term. If required by specific circumstances, other forms of examination may be used.

A student that has failed an examination on two occasions has a right to have another examiner or grading teacher appointed, unless there are special reasons against it. A written request addressed to the Director of Studies should be made no later than two weeks before the next examination opportunity. A written request should be submitted to the Director of Studies no later than two weeks before the next examination opportunity.

Exceptions from examination form as stated in the syllabus can be made for a student who has a decision on pedagogical support for disabilities. Individual adaptations of the examination form should be considered based on the student's needs. The examination form shall be adapted within the framework of the expected learning outcomes stated in the course syllabus. At the request of the student, the course responsible teacher, in consultation with the examiner, must promptly decide on the adapted examination form. The decision must then be notified to the student.

Academic integrity and cheating

As a student, you are expected to act with academic integrity. This means writing and presenting within the limits of the academic rules and expectations communicated in the university's regulations and what is otherwise specified by the responsible department. Disciplinary action may be taken against students who uses unauthorized help aids or in some other way tries to mislead on a test or when another type of task is being evaluated. Rules and regulations concerning the production of academic texts and correct referencing will be applicable to written assignments. Submitted material may be subject to plagiarism control. In addition, Umeå University rules and regulations for education and research apply.

Credit transfer

Academic credit transfers are according to the University credit transfer regulations.