Investments: Fixed Income and Alternative Investments
||Dr Patrick Herbst
Lectures (10h over 5 weeks) cover the core content and provide student with the most important subject-specific knowledge and understanding.
Seminars (4h over 4 weeks) are used to discuss solutions to pre-specified questions.
Problem-solving lectures (4h over 4 weeks) are either staff or student-led sessions in which specific or difficult module content is discussed.
Summative assessment will comprise 90 minutes final exam which will contain both numerical and discursive questions. This assessment will enable students to demonstrate their knowledge of the module material and the application of key concepts to practical problem-solving.
Formative assessment will be in the form of group presentations during seminars. Student groups will be asked to develop and present solutions to seminar questions, as well as be prepared for Q&A on their proposed solutions.
The module aims to provide an understanding of investments and portfolio management in fixed income and alternative investment markets. The module covers the principles of bond valuation, introduces the concepts underlying the term structure of interest rates, and discusses the management of bond portfolios. Other aspects covered are alternative investments such as hedge funds and private equity/venture capital. Upon completion of the module students will have met learning outcomes from levels I, II and III of the CFA® Program Candidate Body of Knowledge in respect of Alternative Investments and Fixed Income and Portfolio Management.
By the end of the module students should be able to:
- Understand various characteristics of bonds and different measures of bond returns.
- Appreciate the principles of bond pricing.
- Calculate the price of bonds.
- Understand spot, zero coupon, forward and par interest rates.
- Understand the term-structure of interest rates.
- Understand duration, modified duration and convexity and to appreciate their impact on the variability of bond prices.
- Comprehend the different terminologies and types of financial instruments which are traded on international bond markets.
- Understand different strategies related to bond portfolio management.
- Understand the structure of hedge funds (including funds of hedge funds) and their differences to mutual funds
- Describe issues in performance measurement and evaluation for hedge funds
- Understand the market structure in private equity and venture capital.
- Appreciate the issues and problems in performance measurement for investments in privately held firms
- methodical working through planning and prioritisation
- oral presentation skills in seminar presentations
- team working skills in group work for seminar assignments
- effective time management and the ability to work under pressure
- Numerical skills, through the manipulation and interpretation of financial data, and application of financial pricing concepts
- Analytical skills, through the analysis of information in order to solve structured problems
- The ability to identify arguments and think critically
Division: Accounting & Finance
This module information is representative of what is included in the module in a given year. Details of actual reading, lectures and coursework may vary year to year and will be available at the beginning of the semester.