Fixed Income Securities
Overview
This unit develops advanced analytical and applied capabilities in fixed income markets, securities, and portfolio construction. Students critically evaluate the valuation, risk, and performance characteristics of a broad range of fixed income instruments, including bonds with embedded options and structured products. Emphasis is placed on modelling and managing interest rate and credit risk, yield curve dynamics, and portfolio immunisation and optimisation strategies. The unit integrates sustainability considerations, including ESG-related risks and opportunities, into fixed income investment analysis and decision-making, and applies contemporary financial technologies to assess, manage, and enhance fixed income portfolio performance in professional investment contexts.
Requisites
Rule
FIN60003 Business Modelling And Analysis
AND
50 Credit Points
01-November-2026
Unit learning outcomes
Students who successfully complete this unit will be able to:
- Critically evaluate the pricing, structure, and risk–return characteristics of fixed income securities and markets.
- Apply advanced quantitative techniques to measure, model, and manage interest rate, credit, and portfolio risk.
- Analyse the term structure of interest rates and yield curve dynamics to assess market expectations and participant behaviour.
- Critically assess the use of financial technologies and data analytics in portfolio construction, performance evaluation, and sustainability risk management..
- Collaborate in professional groups to analyse complex fixed income problems, integrate evidence, and justify portfolio decisions through clear communication.
Teaching methods
Hawthorn
| Type | Hours per week | Number of weeks | Total (number of hours) |
|---|---|---|---|
| On-campus Class | 2.00 | 12 weeks | 24 |
| Online Lecture | 1.00 | 12 weeks | 12 |
| Unspecified Activities Various | 9.50 | 12 weeks | 114 |
| TOTAL | 150 |
Assessment
| Type | Task | Weighting | ULOs |
|---|---|---|---|
| Assessment | Individual | 30 - 50% | 1,2,3 |
| Assignment | Group | 40 - 50% | 1,2,3,4,5 |
| Online Quizzes | Individual | 10 - 20% | 1,2,3 |
Content
- Types of fixed income securities, their characteristics, and market structures
- Valuation techniques and performance assessment of fixed income instruments
- Structured products and bonds with embedded options in portfolio strategies.
- Term structure of interest rates and yield spread analysis
- Interest rate risk measurement and management
- Fundamentals of credit analysis and credit risk models
- Benchmarking and evaluation of fixed income portfolio performance
- Construction, optimisation, and strategic management of fixed income portfolios
- Integration of ESG and sustainability considerations in fixed income investment decisions
Study resources
Reading materials
A list of reading materials and/or required textbooks will be available in the Unit Outline on Canvas.