FM225: Fixed Income Securities, Debt Markets and the Macro Economy

Interest in the fixed income market is ever-growing. With increasing uncertainty in the global financial market, debt markets have been in the spotlight as investors seek income-generating investments.

In this environment, it is vital to have a thorough understanding of the functions and objectives of the major players in debt markets, of the various fixed income instruments and the risks associated with them, and of the models and methods used to value fixed income securities and their derivatives.

This course helps to develop the relevant knowledge and understanding of fixed income instruments and interest rate models. 

Providing you with an overview of the major institutions, organisations and investors, you will cover both the theoretical background of fixed income markets and its practical implementation. Gaining hands-on experience using real-world examples, you will develop the critical thinking and analytical skills to engage in fixed income markets globally.

Prerequisites: Basic mathematics and statistics, as well as Introductory Finance (to the level of FM250) or Introductory Microeconomics (to the level of EC101).

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two written examinations

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course is suitable if you are aiming for a career in the fixed income field or if you want to understand how fixed income is incorporated into an existing investment portfolio. 

• Understand the organisation and structure of debt markets with a focus on the US and the UK
• Identify the role of monetary policy and the central bank in setting interest rates
• Illustrate the relationship between interest rates and future economic activity
• Articulate the basics of interest rate risk management
• Apply state-of-the-art interest rate models to real-world examples
• Relate the course topics to the credit crisis of 2007-2009 and discuss the implications for the future of debt markets

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.