The seminar analyses the main types of bonds, describes typical cash flows and other features of bonds and also gives a brief description of non-conventional instruments. Examples of discounting, day conventions and accrued interest are provided, as well as yield calculations. The connection between yield and price is described, thus naturally leading the participant to duration, convexity and hedging interest-rate risk.

 

At the end of Intrinsic Value's training seminar in the analysis of bonds the participant should be able to:

􀂅  Define  nominal  (notional,  face,  par,  maturity)  value,  maturity,  term to

     maturity, coupon, coupon-rate, zero-coupon and vanilla bond.

􀂅  Describe a bond as a series of cash flows.

􀂅  Define    index-linked    bonds,    securitized   bonds,   amortizing   bonds,

     callable bonds, putable bonds and convertible bonds.

􀂅  Define discount and premium.

􀂅  Calculate the clean and dirty price of a bond.

􀂅  Calculate current yield and yield to maturity.

􀂅  Describe the relationship between yield and price.

􀂅  Discuss the “pull to par” of bond prices.

􀂅  Compare and contrast Macauley Duration and Modified Duration.

􀂅  Define DVBP, dollar duration and key rate duration.

􀂅  Calculate the modified duration of a bond.

􀂅  Describe the shortcomings of Macauley and Modified durations.

􀂅  Calculate the DVBP of a bondn Discuss Effective Duration.

􀂅  Discuss the duration of a floating rate note.

􀂅  Describe the impact of an embedded call or put on duration.

􀂅  Define basis point value (BPV).

􀂅  Calculate the hedge ratio for a bond using BPV.

􀂅  Define and discuss convexity.

􀂅  Describe the impact of an embedded call or put on convexity.

􀂅  Discuss the various risks associated with a bond.