IC314-Bond and Money Markets

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Level:6
Terms in which taught: Autumn term module
Pre-requisites: IC212 Financial Modelling
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2023/4

Module Convenor: Dr Ivan Sangiorgi
Email: ivan.sangiorgi@icmacentre.ac.uk

Type of module:

Summary module description:

Bond and Money Markets explores the economic drivers and relationships between bond, money markets and central bank monetary policies, and the impact of key economic drivers on the pricing, trading strategies and portfolio management for bonds and money market instruments . The module offers students the opportunity to gain an understanding of how these connections affect interest rates, trading positions, portfolio management strategies, funding liquidity management, and the challenges faced by bond issuers, investors, regulators and policy makers in bond and money markets. The course also covers the overall functions, pricing, structure and operation of bond and money markets. Additionally, the module will help students develop mentoring and coaching skills, personal effectiveness, action planning and career decision-making skills.ÌýÌý

Aims:

The main aims of the module are to provide the tools for understanding the functioning and pricing of money markets, their connection with bond markets and central bank interventions, the fundamental determinants of interest rate markets, the commonly used trading strategies and portfolio management strategies.ÌýÌý

The lectures will provide:

1. Ìýthe fundamentals of money markets, repos and bonds, and their pricing,


2. Ìýidentification of trading strategies and portfolio management strategies,


3. Ìýpractical examples of current market situations,


4. an opportunity to mentor Part 1 students,


5. opportunity to learn the GROW coaching model and


6. Ìýopportunity to coach each other to develop career development action plans.Ìý

Assessable learning outcomes:

By the end of the module, it is expected that students will be able to:

• Define the main aspects of the economic theories of the determination of money market rates and their interlinkages with bond markets and central bank monetary policy operations.Ìý


• Explain the role of collateral and repo markets, their pricing and trading techniques.


• Evaluate economic situations to determine the likely implications for bonds and money market instruments.


• Explain and apply common trading strategies and portfolio management strategies of bond and money markets, and the key features of funding liquidity management.Ìý


• Write an actionable career development plan.ÌýÌý

Additional outcomes:

The module aims to supplement quantitative skills with the knowledge of the economics of bond and money markets necessary to design trading strategies, construct and manage portfolios of bonds and money market instruments.Ìý

The module also encourages the student to use Bloomberg for practical real-world examples.Ìý

Furthermore, the students will learn about coaching, and how to make a plan regarding next steps in their careers.Ìý

Outline content:

Lectures include:Ìý

• The economics of bond, money markets and interest rates.Ìý


• Central bank monetary policy operations and quantitative easing.


• Pricing and trading of money market instruments, repos, and bonds, and derivatives.


• Yield curve trading strategies.Ìý


• Pricing and trading of corporate bonds, with a focus on green, social and sustainability bonds and loans.


• Bond portfolio management strategies, bond portfolio construction, and liability-driven strategies.


• The impact of regulation on bonds, money markets, and funding liquidity management.Ìý

Additional topics in terms of career development:Ìý

• Introduction to SMART goal setting, coaching, and the GROW model and their use in career action planningÌý


• Group coaching practice 1Ìý


• Group coaching practice 2Ìý

Global context:

The module uses real-world examples taken from a variety of bond and money markets across the world.

Brief description of teaching and learning methods:

Lectures will be used to explain core theory and concepts discussed in the course.Ìý The module’s delivery follows a practice centred approach and extensively utilises Bloomberg and other financial data providers to gain a more in-depth understanding of certain topics. Seminars will be based around set questions and preparation for examinations. Interactive workshops where students will participate in experiential learning, followed by some input from the facilitator and be signposted to further resources should they wish to continue to develop their knowledge in these areas.

Contact hours:

Ìý	Autumn	Spring	Summer
Lectures	20
Seminars	8
Practicals classes and workshops	8
Guided independent study:	Ìý	Ìý	Ìý
Ìý Ìý Wider reading (independent)	15
Ìý Ìý Wider reading (directed)	35
Ìý Ìý Advance preparation for classes	12
Ìý Ìý Other	40
Ìý Ìý Preparation for seminars	10
Ìý Ìý Revision and preparation	30
Ìý Ìý Reflection	22
Ìý	Ìý	Ìý	Ìý
Total hours by term	200	0	0
Ìý	Ìý	Ìý	Ìý
Total hours for module	200

Summative Assessment Methods:

Method	Percentage
Project output other than dissertation	70
Practical skills assessment	10
Class test administered by School	20

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

Multiple Choice Test: 20%, one hour, twenty questions, scheduled in last week of the Autumn Term.

Individual Project: 70%, up to 3,000 words and separate Excel file with supporting calculations. Students will be required to submit an individual project on trading strategies and portfolio management strategies in bond and money markets, by around week 4 (or 5) of the Spring Term.

Practical skills assessment: 10%, submission of career action plan (maximum 1,000 words) with submission deadline scheduled in week 9 of the Autumn Term.

Ìý

Formative assessment methods:

Question sets discussed during the seminars with feedback provided during those seminars and on Blackboard. Non-graded quizzes during lectures help students to receive formative feedback and prepare for their summative assessment.

Self and peer evaluation of coaching performance and career action plan are used as part of the career workshops and activities.

Penalties for late submission:

The Support Centres will apply the following penalties for work submitted late:

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;
• where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

The University policy statement on penalties for late submission can be found at: /cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/penaltiesforlatesubmission.pdf
You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Assessment requirements for a pass:

40% overall grade.

Reassessment arrangements:

by individual project.Ìý

Additional Costs (specified where applicable):

Last updated: 30 March 2023