Michael J. Coles College of Business

Kennesaw State University

Fixed Income Securities FIN4320

Dr. Stefano Mazzotta, Department of Economics and Finance

Time : MTWT 1:15 - 6:15 p.m.

Place: BB108

Office: BB 344

Office Hours: By appointment

Phone: (770) 423-6341

Fax: (770) 499-3209

E-mail: smazzott@kennesaw.edu

www.mazzotta.info

Course Description

This is an elective advanced finance class. It provides the business undergraduate students with a working knowledge of the fixed-income markets. Fixed income securities represent the largest global financial markets, even larger than equities. Good knowledge of fixed income securities is also useful for the corporate sector, as companies often raise funds in the form of bonds. This course helps with the Chartered Financial Analysts (CFA) examination, which involves many questions on fixed-income markets.
The course is based on lectures and computer exercises. Students are expected to bring a laptop to all classes. The workload for this course is heavy, given the quantitative nature of the topics, and at the same time focused on practical applications. Proficiency in MSExcel and calculus is assumed.
Prerequisites: Business Majors: Sophomore GPA Requirement and FIN 3100; Non business Majors: 60 credit hours including FIN 3100 and permission of the department chair.

Outline and Downloads

Other valid alternatives

Frank J. Fabozzi, 2003, Bond Markets, Analysis and Strategies, 5th edition, Pearson Education.

Suresh Sundaresan, 2001, Fixed Income Markets and Their Derivatives, 2nd edition, Southwestern.

Bruce Tuckman, 2003, Fixed Income Securities: Tools for Today’s Markets, 2nd edition, Wiley.

Learning Objectives

Discipline Specific Knowledge

This course covers topics such as bond valuation, yield-to-maturity, forward rates, discount factors, term structure theories, durations, convexities, and hedging strategies. It also introduces interest-rate risk management, and bond portfolio management. (Assessment -Tests)

Technology

Students learn advanced spreadsheet skill as they apply to financial analysis. (Assessment – Tests)

Web page: I will use my web page to disseminate class notes and other relevant material.

E-mail policy: I will only use your KSU official e-mail address to disseminate information or to contact you. My voice mailbox is often unattended. Your e-mails will receive the highest priority if you write in the subject FIN4830, and immediately after the subject of your message. Messages that do not show FIN4830 in subject line may be filtered and automatically deleted by the anti-spam software..

COURSE POLICIES AND EXPECTATIONS

GRADING

Comprehensive final exam 900 points

Homework (5 sets x 20 points) 100 points

The letter grade for the course is given by the following scale:

1000 Point Scale

A 900-1000 points

B 800-899.99 “

C 700-799.99 “

D 550-699.99 “

F below 549.99 “

No additional extra credit opportunities at the end of the term will be be offered.

Exams: The final exam consists of problems and shorter questions. The content of the computer sessions will be integrant part of the exam material. As the general rule, there will be no make-up exams. In cases of well-documented circumstances beyond your control, you need to contact the instructor (by telephone, or e-mail, or personally) prior to the exam to discuss the possibility of alternative arrangements. Possible alternatives include but are not limited to alternative evaluation instruments, oral examination, or other types at the instructor’s discretion.

General Information about exams: You can use a financial calculator or MSExcel. To earn credit for any problem you must show enough work to explain how the answer is obtained. Simply writing down the final number/answer from a calculator may not earn full credit. You must show how you obtained the answer following procedures covered in class when solving similar problems.

Assigned problems for the course: There are five sets of problems to be submitted individually in hard copy. Each set is worth 20 points of your final grade. The grading is scheme all-or-nothing. You receive full credit if, in my sole judgement, you show significant effort in trying to answer all questions. You receive no credit if there is no sign of work for any question. Late submission receives no credit. In addition to problems for submission other reccomended problems can be found in the outline page. Solutions will be made available to you.

Group work: You are strongly encouraged to work in groups, especially on the homework and the lab reviews. The assigned problem should reflect your own work, even if you work in groups, and academic integrity is expected. There will be no formal assessment of work done in groups.

Attendance and lateness (tardiness): Students are expected to attend class. Attendance in this course is critical and, thus, mandatory. You will not be allowed to take the final and will receive an incomplete if one class is missed or tardiness becomes significant throughout the course (more than 2 times).

Classroom Etiquette:

Come to class prepared: in particular read the assigned chapters for that class

Be attentive

No side conversations, or unrelated web browsing

Turn off all cell phones, beepers

Expectations

You are expected to:

Download lectures notes prior to each class and bring them to class. Also, you are expected to download all materials posted for this class from the web

Read the material assigned prior to class

After each lecture, review the material from the notes, double check with material from the book and apply the concepts to solving the assigned problems

Work the problems and the in class lab in a timely manner. This requires that you work the problems from scratch and learn the process of solving them not just memorizing the answer provided to you. You should work these problems at least two times to make sure you understand the process.

Frequently check the course web page and download the material

Check your KSU e-mail. I will sometimes communicate with the entire class via e-mail

Actively participate to the computer sessions and review the material and procedures covered

What do I think (the professor) it takes to get an A in this course?

Read the material in advance, work on the assigned problems timely manner (same day of the lecture), redo the problems several times, and most importantly develop a critical thinking and active learning approach to the class. A good understanding of the economics, as well as the math of the material are essential to do well in the course.

ADA notice: The Americans with Disabilities Act of 1990 (ADA) requires KSU to provide a reasonable accommodation to any individual who advices us of a physical or mental disability. If you have a physical or mental limitation that requires an accommodation or an academic adjustment, please arrange a meeting with me at your earliest convenience (if have not already done so). You should also contact Carol Pope at (770) 423-6443.

Academic Integrity: Every KSU student is responsible for upholding the provisions of the Student Code of Conduct, as published in the Undergraduate and Graduate Catalogs. Section II of the Student Code of Conduct addresses the University’s policy on academic honesty, including provisions regarding plagiarism and cheating, unauthorized access to University materials, misrepresentation/falsification of University records or academic work, malicious removal, or destruction of materials, malicious/intentional misuse of computer facilities and/or services, and misuse of student identification cards. Incidents of alleged academic misconduct will be handled through the established procedures of the University Judiciary Program, which includes either an “informal” resolution by a faculty member, resulting in a grade adjustment, or a formal hearing procedure, which may subject a student to the Code of Conduct’s minimum one semester suspension requirement.