Fixed Income Securities: Tools for Today's Markets, Second Edition, University Edition

Praise for Fixed Income Securities, Second Edition "What distinguishes this book from many others on the subject is that Tuckman has skillfully combined intuitive rationale with mathematical analysis to give readers a clear and deep understanding of the market. Tuckman has written a comprehensive reference book that should be found on the desks of both seasoned practitioners and novices alike." –Gerald Lucas, Senior Government Strategist, Director, Global Securities Research, Merrill Lynch "This outstanding book offers a well-written and clear tutorial for many of the cutting-edge analytical techniques and models used in practice. Combines a wealth of institutional knowledge, practical tools, and realistic examples, while giving a clear understanding of the underlying theory." –Francis Longstaff, Professor of Finance, The Anderson School at UCLA "An excellent reference for anyone intending to bridge the gap between financial mathematics theory and the practice of financial markets." –Marek Musiela, BNP Paribas "This is an extremely readable book with a balance between technical detail and practical application. Unlike other books in the area, thorough and tightly knit chapters reflect Tuckmans unique background as a well-respected academic and market participant." –Tony D. Kao, Managing Director, Global Fixed Income GM Asset Management A volatile new breed of fixed income securities have taken the market by storm over the past few years. Offering profit-hungry money managers and institutional investors the promise of far greater rewards than traditional fixed securities, these fickle instruments also entail far greater risk. Due, in great part, to the sometimes violent ways in which these new fixed securities respond to changes in interest rates, old imprecise rules of thumb that worked so well in traditional markets only lead to disaster when applied to the likes of forward contracts, floating rate bonds, inverse floaters, IOs, interest rate swaps, and swaptions. Of course researchers have developed sophisticated tools for analyzing and applying these new instruments, but most of these, unfortunately, are over the heads of average practitioners ... or are they? In this highly readable, applications-oriented guide to one of today's hottest financial topics, Bruce Tuckman clearly, methodically, and with a bare minimum of difficult math, describes today's vast and growing array of new fixed income securities and schools you in cutting-edge techniques for fixed income application and risk control. Using easy-to-follow charts and tables that simplify the most complex subject matter, he walks you through the basic principles and procedures used in pricing today's fixed income choices - from securities and fixed cash flows to embedded options in corporate bonds and mortgage-backed securities. Working in a methodical, step-wise fashion, Tuckman begins with an in-depth review of the basic concepts and tools for traditional fixed income securities. From there he introduces modern arbitrage-free techniques for pricing more complex fixed income securities and their derivatives. He next acquaints readers with measures of price sensitivity crucial to portfolio risk assessment, asset/liability management, and hedging. And finally, by focusing in turn on futures, floaters, swaps, corporates, and mortgages, he clearly illustrates how to apply the ideas and tools developed in the rest of the book.

Praise for Fixed Income Securities, Second Edition "What distinguishes this book from many others on the subject is that Tuckman has skillfully combined intuitive rationale with mathematical analysis to give readers a clear and deep understanding of the market. Tuckman has written a comprehensive reference book that should be found on the desks of both seasoned practitioners and novices alike." Gerald Lucas, Senior Government Strategist, Director, Global Securities Research, Merrill Lynch "This outstanding book offers a well-written and clear tutorial for many of the cutting-edge analytical techniques and models used in practice. Combines a wealth of institutional knowledge, practical tools, and realistic examples, while giving a clear understanding of the underlying theory." Francis Longstaff, Professor of Finance, The Anderson School at UCLA "An excellent reference for anyone intending to bridge the gap between financial mathematics theory and the practice of financial markets." Marek Musiela, BNP Paribas "This is an extremely readable book with a balance between technical detail and practical application. Unlike other books in the area, thorough and tightly knit chapters reflect Tuckman s unique background as a well-respected academic and market participant." Tony D. Kao, Managing Director, Global Fixed Income GM Asset Management

New Fixed Income Securities, Respond To Interest Rates Quite Differently Than The Traditional Similar Securities, Making Them A Risky Investment. This Book Identifies And Describes These Types Of Securities And Presents Risk Control Strategies. The Relative Pricing Of Fixed Income Securities With Fixed Cash Flows -- Bond Prices, Discount Factors, And Arbitrage -- Bond Prices, Spot Rates, And Forward Rates -- Yield-to-maturity -- Generalizations And Curve Fitting -- Measures Of Price Sensitivity And Hedging -- One-factor Measures Of Price Sensitivity -- Measures Of Price Sensitivity Based On Parallel Yield Shifts -- Key Rate And Bucket Exposures -- Regression-based Hedging -- Term Structure Models -- The Science Of Term Structure Models -- The Short-rate Process And The Shape Of The Term Structure -- The Art Of Term Structure Models : Drift -- The Art Of Term Structure Models : Volatility And Distribution -- Multi-factor Term Structure Models -- Trading With Term Structure Models -- Selected Securities -- Repo -- Forward Contracts -- Eurodollar And Fed Funds Futures -- Interest Rate Swaps -- Fixed Income Options -- Note And Bond Futures -- Mortgage-backed Securities -- Exercises. Bruce Tuckman. Includes Bibliographical References (pages 497-499) And Index. Fixed Income Securities Tools for Today's Markets Second Edition; CONTENTS; INTRODUCTION; ACKNOWLEDGMENTS; PART ONE The Relative Pricing of Fixed Income Securities with Fixed Cash Flows; PART TWO Measures of Price Sensitivity and Hedging; PART THREE Term Structure Models; PART FOUR Selected Securities; EXERCISES; REFERENCES AND SUGGESTIONS FOR FURTHER READING; INDEX. Includes a series of end-of-chapter questions for students. * Explains the subtleties of fixed income mathematics. * Discusses multi-factor interest rate models and offers four original case studies. * Covers the latest fixed income securities valuation models and techniques, and their application in real world situations. Fixed income securities, such as bonds, can be hard to value when unforeseen factors impact the market. This Second Edition of Fixed Income Securities has been fully updated to reflect the most advanced thinking on valuation and modeling of fixed income securities. This fully updated and revised university edition of "Fixed Income Securities" provides advanced thinking in this field and comprehensively shows how to value the complete universe of fixed income securities. How much are people willing to pay today in order to received $1,000 one year from today?