Fixed Income and Debt

Fixed Income - Part 1 (2021)


This eCourse consists of three modules on Bonds. Bond markets are a critical source of finance for governments, banks, corporations, and other borrowers. Module 1 will introduce you to the fundamentals of bonds as a fixed income instrument, covering the key features and terminology associated with these securities in addition to outlining the role of the major players in the market.

Module 2 looks at the different participants and processes in government and nongovernment bond primary markets where the distribution and trading of newly-issued bonds take place.

Module 3 looks at the key role played by market makers in providing liquidity to the bond market. It also examines crucial bond market conventions such as clean versus dirty prices and nonwhole periods. Trading in bond markets is largely over-the-counter (OTC) rather than exchange-based, with electronic marketplaces becoming increasingly more important in recent times.


On completion of this course, you will be able to:
- Define what a bond is
- List the key features associated with bonds such as coupon, principal, maturity, price, and yield
- Recognize the importance of secondary market liquidity in the bond markets
- Recall the development of bond formats from bearer issues to paperless book-entry records Identify the key stages in the settlement of a bond transaction
- List the main issuers and investors in the global bond markets
- Recognise the difference between the primary and secondary markets for bonds
- Identify the process by which corporate bonds are underwritten and distributed to investors Recall how the private placement market is used by issuers to tap nontraditional sources of finance
- Recognise the importance of bond auctions for government security issuance
- Recognise the importance of the secondary market for bonds
- Define the role played by market makers in providing liquidity to bond markets
- Recognise the difference between market maker-driven and order-driven markets for bonds
- Identify the role played by primary dealers in government securities
- Calculate accrued interest for nonwhole periods using the Actual/Actual convention
- Recall the difference between clean and dirty prices for bonds

Content Highlight

Module 1: Bond Markets - An Introduction
Topic 1: Overview
Topic 2: Key Features of Bonds
Topic 3: Yield
Topic 4: Liquidity
Topic 5: Bond Formats
Topic 6: Settlement
Topic 7: Issuers & Investors

Module 2: Bond Markets - Issuing
Topic 1: Overview of Primary Markets
Topic 2: Corporate Bond Primary Market
Topic 3: Private Placements
Topic 4: Government Bond Auctions

Module 3: Bond Markets - Trading
Topic 1: Secondary Markets for Bonds
Topic 2: Market Making
Topic 3: Market Making vs. Order-Driven Markets
Topic 4: Primary Dealers
Topic 5: Price & Yield Calculations
Topic 6: Clean & Dirty Bond Prices

Administrative Details

Relevant Subject
Type 1 - Dealing in securities,Type 4 - Advising on securities,Type 6 - Advising on corporate finance
SFC:2.50, PWMA:2.50
All Member: HKD710
Non-Member: HKD1,050
Staff of Corporate Member: HKD710