The objectives of this module are two-fold. The first objective of this module is to introduce you to fixed income markets and the valuation of debt. You will examine the determination of key economic rates and the relationship between risk, time, and credit quality. Using this information, you will investigate the theories of term and credit spreads, and the practice of using yield curves as both a forecasting tool and as a barometer for the financial health of an economy. You will also explore how central banks control short- and long-term interest rates to influence liquidity and wealth generation in financial markets and global economies. The second objective of this module is to introduce you to Derivative Markets and the means by which derivatives are formed. You will be instructed on the key factors that underlie the valuation and performance assessment of different types of financial derivatives, and the multitude of ways in which financial practitioners may arrive at risk-neutral derivative valuations. You will become proficient in fundamental option pricing models and learn about risk exposure metrics and tools used to inform trading and risk management practices.

The module covers fundamental issues in fixed income, central banking, and derivatives theory, including sessions on 'Function of Interest Rates and Debt', 'International Capital Markets and Credit Risk', 'Structured Cash Flow Valuation Methods', 'Why and How do Interest Rates Change? Risk, Term Structure, and Effect on Bond Prices', 'Term Structure of Interest Rates, and Yield Curve Trading Strategies', 'Central Banking: Functions, Objectives, and Interest Rate Determination', 'Introduction to Derivative Instruments and Markets', 'Market Reference Rates: Transitions & Key Elements in Deriving Contemporary Rates', 'Derivative Markets & Valuation Principles: Forwards, Futures, Options, Swaps', 'Option Pricing Models & Risk-neutral Valuations: Binomial Tree, BSM', 'Risk Exposure Metrics, Hedging', 'Interest Rate Derivatives and Hybrid Fixed Income Securities'

On successful completion of this module, students will be able to: Describe the relationship between money, risk, and time. Discuss how central banks influence interest rates and yield curves by controlling market liquidity and economic growth opportunities. Calculate spot and forward fixed income and derivative market instruments, including bonds, forwards, futures, and options. Apply appropriate mathematical and coding operations to derive risk-neutral Binomial and Black Scholes option pricing valuations. Analyse contemporary market conditions in financial markets and central banking using market evidence, news media, and fixed income theories.

On successful completion of this module, students will be able to: Formulate and articulate insightful opinions on contemporary issues in fixed income and derivative markets

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This module is designed to improve theoretical and computational skills in lecture, tutorial, and lab settings. A learn-by-doing approach will be implemented in this class, meaning you will develop your technical and programming skills as well as your theoretical and computational skills. Our discussions will be guided by contemporary practice drawn from sources such as news media, industry-leading case studies, and reports released by financial institutions and supranational bodies. You will be assessed through a mixture of formative and summative assessments, allowing for cognitive and affective learning to be demonstrated. The focus on 'learn-by-doing' problem solving threaded throughout the module promotes the university graduate attributes by requiring you to articulate your knowledge and collaborate with your classmates on historical as well as contemporary issues in finance. Upon successful completion of the class, you will have furthered your expertise in fixed income, central banking, and derivatives theory. You will also be able to leverage Excel and Python for data manipulation, data inspection, and derivative pricing.