MBAX 6260

Fixed Income Investing

 

Spring 2019

David M. Gross, Ph.D.

 

 

 

Final Exam Study Outline

Final Exam Formula Sheet

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More Clean and Dirty price Examples

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CDS Examples

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Assigned HW 04 – Credit Analysis Part 1

Due Tuesday April 9 at the Start of Class

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Guest Speaker notes

Guest Speak Slides

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Contact Information:

Office: KOBL 402

Office Phone: 303-735-6181

Office Hours: T, Th 1:30 to 2:30

Email:  David.Gross@Colorado.Edu

 

 

FRED:

FRED Excel Add-In from the St Louis Fed

FRED Installation Instructions

FRED Users Guide (PDF)

FRED TED Spread (only works if FRED is installed)

 

 

 

Links and Readings:

 

Required Text: Bond Markets, Analysis and Strategies (9th edition), by Fabozzi, Frank J., Pearson publishing.

 

Note on textbook editions: I will assign material from the 9th edition. You are responsible for the material assigned. It is not possible for me to determine all the differences between the current edition, all the previous editions and various alternative (international) editions. By not giving students official permission to use a different edition, the onus is on you to determine difference between the current edition from which material will be assigned and the edition you select.

 

Syllabus

Fixed Income Products

Securities Industry and Financial Markets Association (SIFMA) Statistics

CNN Money Interest Rates

 

91 Day T-Bill Auction Results

10 Year T-Note Auction Results

 

Chapter 05 Bootstrap Examples

 

VRDO Primer

 

Corporate Bonds

Fabozzi Chapter 07 Tables

S&P Recovery Rating Performance

S&P Corporate Governance Risk

S&P 2014 Annual Global Corporate Default Study and Rating Transitions

(Scroll down to Tables 20 and on to see transition matrices.)

Determinants of Beta

S&P General Corporate Rating Criteria

S&P Rating Criteria Leisure and Sports

If GE Debt Gets Junked

 

Portfolio Management

2018 Wilshire State Retirement Asset Allocation (Exhibits 5 & 6, page 6)

S&P US HY Corp 5 to 7 Index Fact Sheet

 

 

 

Spreadsheets:

Ch 02 Price Yield

Ch 02 Price Time

Ch 02 Floater, Inverse Floater

 

Ch 03 Bond Portfolio Yield

 

Ch 05 FRED Treasury Yield Curves 2019-01

Ch 05 FRED Aaa and Bbb Spread to Treasuries 2019-01

Ch 05 FRED Treasury Muni Spreads

 

Clean and Dirty Price Act/Act and 30/360 Worksheet

 

Ch 22 Operating and Financial Leverage

 

Ch 32 CDS Payments

 

Ch 24 Liability Duration Matching

Ch 24 Port and Swap vs Index Duration Match

Ch 24 Returns to Yld Curve Strategies Bullet v Barbell

Ch 24 2019-04-16 Returns to Yld Curve Strategies Bullet v Barbell

 

Ch 25 Tracking Error Calculations

 

 

 

 

Lecture Notes:

Chapter 01 – Introduction (Updated 1/14 at 3:30)

Chapter 02 – Pricing Bonds

Chapter 03 – Measuring Yield

Chapter 04 – Bond price Volatility

Chapter 05 – Yields and the Term Structure of Interest Rates

Chapter 06 – Treasury Bonds

Chapter 08 – Muni Bonds

Chapter 07 – Corporate Debt Instruments

Chapter 22 – Corporate Credit Analysis

Chapter 32 – Credit Default Swaps

Chapter 24 – Bond Portfolio Management

Chapter 25 – Bond Portfolio Construction

 

 

 

 

Review Homework:

For some chapters I have written “Additional Questions” or “Extra Questions.” These Additional Questions ARE fair game for exams.

 

Chapter 01

Chapter 02

Chapter 03

Chapter 04

Chapter 05 (Amended 2/20 – Additional forward rate questions)

Chapter 05 Bootstrap Examples (Amended 2/20 – Additional examples)

Chapter 06

Clean and Dirty Price Act/Act and 30/360 Example

Chapter 08

Chapter 07

Chapter 22

Chapter 32

Chapter 32 CDS Trade Scenario Examples

Chapter 32 CDS Valuation Examples

Chapter 24

Chapter 24 Bullet vs Barbell Returns Exam Style

Chapter 25

 

 

Assigned Homework:

Assigned HW 1 Answers (This is a non-working spreadsheet.)

Assigned HW 2 Answers (This is a non-working spreadsheet.)

 

 

Exams:

Quiz 1 with Answers

Quiz 1 Score Distribution

 

Midterm with Answers

Midterm Formula Sheet

Midterm Score Distribution

 

Quiz 2 Outline

Quiz 2 with Answers

Quiz 2 Score Distribution