What you'll learn

Understand how yield curves depict fixed income instrument pricing and risk premiums
Explain duration as a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates
Describe the different types of duration, and how each is used in managing and/or quantifying risk
iscuss alternative yield curves that are used to price or assess the value of fixed income instruments
Apply total return analysis over a variety of interest rate scenarios
Interpret current coupon yield curves, par coupon yield curves, spot rate curves, treasury strip curves and forward rate curves
Use TRA to assess risk and return as an alternative to simply using yield to maturity as an estimate of future returns

Course content

7 sections • 27 lectures • 3h 16m total length

Welcome!0:52
Introduction to Yield Curves9:44
In this module, you will learn the basics of yield curves and how they are used in financial markets.
Types of Yield Curves and Yield Curve Spreads9:42
This module covers the different types of yield curves and how to calculate and interpret yield curve spreads.
Quiz: Module 1
Hands-On Lab: Constructing and Interpreting Yield Curves0:51
By the end of this activity, learners will be able to construct yield curves, differentiate between curve types (on-the-run, off-the-run, spot rate), and analyze their implications for interest rates, liquidity, and risk in financial markets.

Introduction to Duration7:52
In this module, you will learn about duration, a measure of a bond's price sensitivity to changes in interest rates.
Types of Duration11:20
This module covers the different types of duration, including modified duration and effective duration, and how to calculate them.
Modified Duration9:07
In this module, you will learn about modified duration, a measure of a bond's price sensitivity to changes in interest rates, and how to calculate it.
Duration Illustration10:20
This module includes an illustration of how duration can be used to compare the price sensitivity of different bonds.
Duration of Callable Bonds10:19
In this module, you will learn about the duration of callable bonds and how it is affected by the likelihood of the bond being called.
Quiz: Module 2
Hands-On Learning: Analyzing Duration and Price Sensitivity of Bonds1:04
To apply the concept of bond duration by calculating and analyzing different duration measures and their implications on bond price sensitivity, using both callable and non-callable bonds.

Yield Curve Shapes and the Level of Interest Rates8:16
This module covers the various shapes yield curves can take and how the level of interest rates affects the shape of the curve.
Yield Curve Theories11:09
In this module, you will learn about the various theories that attempt to explain the shape of the yield curve.
Yield Curves and the Business Cycle9:48
This module covers the relationship between yield curves and the business cycle, including how the shape of the curve can predict economic activity.
Hands-On Learning Activity: The Level of Rates and Shape of the Yield Curve1:03
In this Hands-On Learning activity, you will apply your understanding of yield curve shapes, interest rate levels, and economic theories discussed in Section 3. You will analyze real-world yield curve scenarios, perform basic financial calculations, and interpret the implications of yield curve changes in the context of business cycles and economic expectations.
Quiz: Module 3

Spot Rates and Spot Rate Curves9:58
In this module, you will learn how to value bonds and use rich/cheap analysis to evaluate bond market conditions.
Calculation of Spot Rates9:17
This module covers the calculation of spot rates from bond prices and how to use these rates to construct a spot rate curve.
Bond Valuation and Rich/Cheap Analysis11:18
In this module, you will learn how to value bonds and use rich/cheap analysis to evaluate bond market conditions.
Treasury Strips and the Strip Rate Curve11:19
This module covers the use of Treasury strips and the construction of the strip rate curve for the purpose of valuing and trading fixed income securities.
Forward Rates10:01
In this module, you will learn about forward rates, which are rates for future periods that can be derived from the current yield curve.
Calculating Forward Rates10:27
This module covers the calculation of forward rates from the current yield curve and how to use forward rates in bond valuation.
Forward Rate Applications5:07
In this module, you will learn about the various applications of forward rates, including the calculation of forward prices for bonds and the use of forward rates in interest rate risk management.
Quiz: Module 4
Hands-On Learning Activity: Analyzing Spot and Forward Rate Curves1:25
This Hands-On Learning activity is designed to help you apply your understanding of spot rate curves, forward rate curves, and their applications in bond valuation. All tasks are based on the content from Module 4: Spot Rates and Forward Rates. Follow the steps below carefully. Use a calculator or spreadsheet software for calculations as needed.
Recommending Duration Adjustments Based on Yield Curve Analysis

Total Return Analysis10:59
This module covers the use of total return analysis to evaluate the performance of bond portfolios.
Total Return Analysis Illustration9:55
In this module, you will learn about total return analysis through an illustration of how it can be applied to a bond portfolio.
Quiz: Module 5
Hands-On Learning Activity: Total Return Analysis1:31
This Hands-On Learning activity is designed to help you apply the concepts of Total Return Analysis as covered in Module 5. You will estimate total return for a bond investment using horizon analysis. You will work through realistic interest rate forecasting scenarios, cash flow reinvestment, and bond pricing. Use a calculator or spreadsheet to perform your calculations. All figures are in USD.

Requirements

Participants are expected to have a basic understanding of math.
A financial calculator is recommended for optimal learning throughout the course.
Knowledge of the English language is required.

Description

In the finance industry, a yield curve serves as a key tool for visualising market conditions, particularly for fixed-income instruments such as corporate bonds and government notes. It provides a snapshot of interest rates at a specific moment in time, plotting yield to maturity on the vertical axis and time to maturity on the horizontal axis. The yield curve is also known as the "term structure of interest rates."

Professionals across the financial markets, including investors, analysts, bankers, advisors, and traders, must understand yield curves and how they evolve in response to economic conditions, market movements, and government policy. Moreover, it's essential to communicate these curves effectively to both clients and colleagues who may not have a financial background.

This course offers a deep dive into yield curves, starting with the fundamentals:

What is a yield curve, and how is it constructed?

Why do yield curves matter in investment management and financial risk management?

What is duration, and how does it influence the shape of the yield curve?

How is duration used in market analysis and assessing fixed income risk?

What are spot rates and forward rates?

What is total return analysis, and how does it relate to risk and return analysis in investment management?

For those pursuing careers in investment banking, investment advisory, or asset management, understanding yield curve inversion and the nuances of fixed income instruments is essential. This course is indispensable for anyone looking to master the tools and methodologies that drive success in these competitive financial fields.

More about this course and Starweaver

This course is led by a seasoned capital markets industry practitioner and executive with many years of hands-on, in-the-trenches financial markets sales, trading and analysis work. It has been designed, produced and delivered by Starweaver. Starweaver is one of the most highly regarded, well-established training providers in the World, providing training courses to many of the leading financial institutions and technology companies, including:

Ahli United Bank; Mashreqbank; American Express; ANZ Bank; ATT; Banco Votorantim; Bank of America; Bank of America Global Markets; Bank of America Private Bank; Barclay Bank; BMO Financial Group; BMO Financial Services; BNP Paribas; Boeing; Cigna; Citibank; Cognizant; Commerzbank; Credit Lyonnais/Calyon; Electrosonic; Farm Credit Administration; Fifth Third Bank; GENPACT; GEP Software; GLG Group; Hartford; HCL; HCL; Helaba; HSBC; HSBC Corporate Bank; HSBC India; HSBC Private Bank; Legal & General; National Australia Bank; Nomura Securities; PNC Financial Services Group; Quintiles; RAK Bank; Regions Bank; Royal Bank of Canada; Royal Bank of Scotland; Santander Corporate Bank; Tata Consultancy Services; Union Bank; ValueMomentum; Wells Fargo; Wells Fargo India Solutions; Westpac Corporate Bank; Wipro; and, many others.

Happy learning.

Who this course is for:

This course is designed for analysts and associates in commercial banking, corporate banking, and investment banking, as well as professionals specializing in financial risk management, and investment management. It is ideal for individuals seeking to deepen their expertise in yield curves, credit risk analysis, and the broader market dynamics influencing fixed income instruments.

What you'll learn

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Course content

Introduction to Yield Curves4 lectures • 21min

Duration and its Applications6 lectures • 50min

The Level of Rates and Shape of the Yield Curve4 lectures • 30min

Spot Rates and Forward Rates9 lectures • 1hr 9min

Total Return Analysis3 lectures • 22min

Closing Remarks1 lecture • 3min

Bonus Lecture1 lecture • 1min

Requirements

Description

Who this course is for: