This course focuses on fixed income securities such as bonds and preferred stock and related derivative securities such as interest rate futures contracts. Considerable emphasis is given to different types of debt instruments including money market securities, Treasury bonds, government agency securities, municipal bonds, corporate bonds, convertible bonds, and asset-backed securities. Also emphasized will be bond ratings, interest rate risk, bond risk measures such as duration and convexity, bond portfolio immunization and the use of interest rate future contracts to hedge interest rate risk. Considerable attention will be paid to mortgaged-backed securities including mortgage bonds, pass-through mortgage securities, CMO's, and such derivatives as "floaters" and "reverse floaters".

Prerequisite: FINA3100