PHILADELPHIA UNIVERSITY
School of Business Administration
Syllabus
Course Title
Course Number : iMBA-777
Semester
Instructor
Office Phone
Email
Office
Fixed Income Securities (iMBA-777)
Fall 2015
: Fixed Income Securities
: Fall 2015
: Dr. D.K. Malhotra
: (215) 951-2813
: MalhotraD@philau.edu
: 104B Tuttleman
Office Hours appointment.
Web Site
Credits
Course Type
Prerequisite:
: 10:00 a.m. - 11:30 a.m. Monday and Wednesday or by
: http://faculty.philau.edu/MalhotraD
: 3.0
: 3-0-3
All students must have completed iMBA 629 Financial Policy and Planning.
It is the students' responsibility to make certain that they have successfully completed these courses. If at any time during the semester it is learned that a student has not successfully completed these prerequisites, he/she will be dropped from the course receiving, neither credit nor tuition refund.
Course Description:
This course focuses on the fixed income market with emphasis on bond market.
Topics include pricing of bonds, bond price volatility, types of fixed income securities, term structure of interest rates, and bond portfolio management strategies. Various fixed income products are analyzed in the course, including some derivative products in the context of bond market.
Course Objective:
The objective of this course is to further enhance the student’s understanding and awareness of the fixed income securities market. This course is intended to be a blend of both the theoretical and practical aspects of fixed income investment decision making. Various concepts and strategies of the fixed income securities

market will be illustrated with the use of MATLAB (Finance Toolbox) and Fixed
Income Securities software.
Required Text(s) and/or Supplies:
Bond Markets, Analysis and Strategies by Frank J. Fabozzi, Eighth Edition,
Pearson, Inc.
ISBN-10: 013274354X
ISBN-13: 9780132743549
Additional Recommended Readings:
The Wall Street Journal; Barron’s Paper; The Financial Times; Euromoney;
Corporate Finance; Business Week; Euroweek.
Attendance:
Attendance is mandatory. You are responsible for what is covered in the class and any absence on your part leaves you responsible for finding out what was presented in class. You will benefit a lot from the course by doing problems and reviewing concepts, which are covered in the class.
Requirements:
I. Attend class regularly
2. Do Class Assignments.
3. Study class notes prior to next class and come prepared to the class to participate actively in discussions.
4. Be able to take time pressure tests.
5. Be able to perform basic statistics.
Course Outcomes:
Upon course completion, students will be able to:
1. Demonstrate proficiency in bond valuation and bond yield computation
2. Demonstrate proficiency in analyzing bond price volatility
3. Demonstrate ability to understand and analyze mortgage loans and mortgage backed securities
4. Demonstrate the ability to analyze bonds

Overview of expectations for the course, including major assignments or projects:
Assignments Weight Evaluates
Outcomes? which Course
30% HW Assignments (Each assignment will be equally weighted)
HW 1
HW 2
HW 3
HW 4
Mid-term Exam
Final Exam
Class Participation
30%
30%
10%
Outcome 1
Outcome 2
Outcome 3
Outcome 4
Outcomes 1 and 2
Outcomes 3 and 4
Outcomes 1, 2, 3, and 4
No late homework will be accepted. No makeup exams will be given. If you miss an exam due to an unavoidable reason, the grade on the missed exam will be transferred to the final exam. THE FINAL EXAM IS COMPULSORY AND
COMPREHENSIVE. DO NOT EXPECT ANY SCALING ON THE GRADES.
Case Reports:
The cases should be presented in a manner acceptable in a large corporation. The decision as well as the qualitative and quantitative reasons for the decision should be communicated in a typed memo. The relevant information should follow the memo in table form with supporting notes showing calculations. Cases will be evaluated according to content, analysis, presentations, and continuity. If any two cases are identical, plagiarism will be assumed and no credit will be given to
either case.
Academic Honesty:
Students are expected to perform according to a code of academic honesty that prohibits cheating on tests and plagiarizing others' work. Violation of this code may result in failure of the course.

Grading Policy:
Letter Grade
A
A-
B+
B
B-
C+
C
C-
F
Grade
Points
4.00
3.67
3.33
3.00
2.67
2.33
2.00
1.67
0.00
Percent Allocated
93% or higher
90% to < 93%
87% to < 90%
83% to < 87%
80% to <83%
77% to <80%
73% to <77%
70% to <73%
<70%
Academic Integrity
Academic integrity is a policy about ethical behavior at Philadelphia University regarding one’s intentions, decisions, and actions while conducting academic work.
It includes values such as avoidance of the following: cheating; plagiarism; copying; the fabrication of information; and facilitating, or denying others access to information. It expects honesty and rigor in research, course work, writing and publishing. Academic Integrity is taken seriously in this course. Any student violating the University’s academic integrity policy will be subject to appropriate sanctions. The University’s complete academic integrity policy is available in the
Academic Catalog and University’s Student Handbook. Academic resources, including information on citation and documentation for all written work, projects, and presentations, are also available on the Learning and Advising Center’s website: http://www.philau.edu/learning/writingguidelines.html.
Policy on Lateness, Absences, Makeup Work
In accordance with University policy, students are expected to attend class every day with all relevant required course materials and work. If you are absent from class, contact your faculty as soon as possible, preferably before the next class meeting. Students remain responsible for any missed work, for work completed in class and for work due and must arrange for that work to be delivered to the faculty on time.
Serious illness, family emergencies, or other crises mean that students should contact the Dean of Students Office as soon as possible (215-951-2740) and follow up with a direct explanation to the faculty. Students are responsible for all work related to this class; however, faculty may (but are not required to) make some accommodation in terms of time of delivery and/or make-up exams for major tests.

Please consult with your faculty and your academic advisor to determine whether you should withdraw from the course or request an incomplete grade in the case of serious illness or crises.
Collection of Student Work for Assessment
Philadelphia University is committed to providing excellent and innovative educational opportunities to its students. To help us maintain quality academic offerings and to conform to professional accreditation requirements where relevant, the University and its programs regularly examine the effectiveness of the curricula, teaching, services, and programs the University provides. As Philadelphia University sees appropriate, it may retain representative examples or copies of student work from all courses. This might include papers, exams, creative works, or portfolios developed and submitted in courses or to satisfy the requirements for degree programs as well as surveys, focus group information, and reflective exercises.
Information on Digital Resources
This course is available on blackboard at http://bb.philau.edu
Academic Support Services: Gutman Library (www.philau.edu/library)
Gutman Library is a gateway to a variety of information resources. The homepage of the library provides 24/7 access to online databases of articles, e-journal collections, e-books, and specialized information to support this course. The library building is wireless, has 80 available workstations (PCs and Macs), printers, scanners, and copiers; as well as individual and group study spaces.
The following databases available in the library will be useful in this course:
Standard and Poor’s NetAdvantage
ABI/Inform and Business Source Premier
Wall Street Journal
Wall Street Journal – Asia, Financial Times
New York Times
Students can also contact the Reference Desk directly Reference@philau.edu for more specialized help in identifying sources, or stop by the Reference Desk when the library is open.
The Learning and Advising Center (www.philau.edu/learning)
The Learning and Advising Center provides one-on-one tutoring assistance for writing, study strategies, test taking, and specific Philadelphia University courses*.
To make a tutoring appointment, students should stop by the Learning and Advising
Center in Haggar Hall or call (215) 951-2799. Academic resources, including information on citation and documentation, note taking, and study strategies are available on the Center’s website.
Technology Resources (http://www.philau.edu/OIT/)
The campus is wireless. If you need a computer, Gutman Library and Search Hall

have open access computers. For assistance with technology issues, students should contact the Technology Help Desk at (215) 951-4648 or send an email to helpdesk@philau.edu.
Disability Services (http://www.philau.edu/disabilityservices/index.html)
Philadelphia University does not discriminate on the basis of disability, in accordance with the Americans with Disabilities Act and Section 504 of the
Rehabilitation Act of 1973. The University makes accommodations for students with disabilities who seek accommodations in the classroom. All students interested in receiving accommodations must contact the Office of Disability
Services by email at DisabilityServices@philau.edu, phone at (215.951.6830) or office visit. The office is located in Kanbar 102D. Students requesting accommodations in the classroom must present a current accommodation letter from the Office of Disability Services to the instructor, before accommodations may be made. Philadelphia University works with students with disabilities regarding equal access to all services and programs. Requests for accommodations may be made at any time (although accommodations are not retroactive). The University encourages all students who have any inquiries to contact Disability Services.
Inclement Weather Policy
To ensure the continuation of student learning in time of emergencies, including severe weather, it is the policy of Philadelphia University not to cancel classes.
However, if on campus sessions are not possible, students are responsible for checking their university email and/or Blackboard for information regarding holding of classes through online adobeconnect.

08/24 Introduction to the Bond Market
 Introduction to Fixed Income Securities Course
 Features of Bonds
08/31 Pricing of Bonds
Risks of Investing in Bonds
Price Quotes, Accrued Interest, and Invoice Price
09/07
09/14
Tentative Course Outline:
Labor Day (No Class)
Pricing of Bonds contd…
Measuring Yields
 Bond Pricing
 Concept of Yield to Maturity
 Source of a Bond’s Dollar Return
 Total Return
 Measuring Yield
09/21 Bond Yields Contd…
Bond Price Volatility
 Price/Yield Relationship
 Price Volatility Characteristics
 Measuring Bond Price Volatility
09/28 Bond Price Volatility
 Bond Duration
 Convexity of a Bond
10/05 Bond Price Volatility
Midterm Exam
10/12 The Term Structure of Interest Rates
 Analysis of Yield Curve
 Determinants of Shape of the Yield Curve
 Implied Forward Rates
10/19
10/26
The Term Structure of Interest Rates
Mortgage Loans
 Mortgage Instruments

11/02
11/09
11/16
11/23
11/30
12/07
 Risks Associated with Mortgage Loans
Mortgage Pass-Through Securities
 Cash Flow Characteristics
 Agency Pass-Through
 Conventional Pass-Through
 Price and Yield Conventions
 Prepayment Risk and Asset/Liability Management
Collateralized Mortgage Obligations and Stripped MBS
 Collateralized Mortgage Obligations
 Stripped Mortgage-Backed Securities
Analysis of Bonds with Embedded Options
 Callable Bonds
 Price/Yield Relationship for a Callable Bond
 Duration and Convexity
 Minimum Value of a Convertible Bond
 Market Conversion Price
 Downside Risk
 Pros and Cons of Investing in Convertible Bonds
Bond Portfolio Management Strategies
 Overview
 Interest Rate Expectation Strategies
 Yield Curve Strategies
 Yield Spread Strategies
 Option-Adjusted Spread-Based Strategies
Bond Portfolio Management
Structured Portfolio Strategies
 Indexing
 Portfolio Size and Diversification of a Bond Portfolio
 Liability Funding