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.
The most timely, practical, and, above all, the most accessible guide to the subject now available, Fixed Income Securities is a must read for all fixed income professionals, institutional investors, money managers, financial analysts, traders, and other financial professionals.
The practical and accessible guide to today's new wave of fixed income tools and products
In the most practical and accessible guide written on the subject, Bruce Tuckman schools readers in an array of cutting-edge techniques for mastering today's challenging fixed income markets. Using easy-to-follow charts and tables that simplify even the most complex subject matter, Tuckman clearly describes the new generation of models for pricing and hedging and applies them to a wide range of fixed income securities—futures, swaps, mortgage strips, and more.
"A wonderful mix of academic theory and institutional practice. This is essential reading for any thinking person with an eye towards a successful career in the fixed income financial markets." —Mark Grinblatt Assoc. Professor of Finance Anderson Graduate School of Management, UCLA Member, Board of Directors Salomon Swapco, Inc.
"Tuckman combines intuition with precision in this first rate presentation of fixed income securities." —William Silber, Professor Leonard N. Stern School of Business New York University
"This book not only presents a firm theoretical basis for understanding and valuing bonds, it also presents a framework that is rich enough to capture the institutional details that make debt markets so fascinating. This book should be read by both practitioners and academics with an interest in debt instruments." —Martin J. Gruber Nomura Professor of Finance Leonard N. Stern School of Business New York University
"Tuckman manages to simplify the complex in this well-written book. I recommend this book to anyone studying the valuation of fixed income securities." —John D. Finnerty McFarland, Dewey & Co. Editor, Financial Management
BRUCE TUCKMAN, PhD, has taught finance and fixed income securities to MBAs, executive MBAs, and fixed income professionals, including participants in on-site training programs at major investment banks. He has published numerous articles and has spoken frequently at academic and professional conferences. Since receiving his doctorate in economics from MIT, he has been an Assistant Professor of Finance at New York University's Stern School of Business and Visiting Assistant Professor at UCLA's Anderson Graduate School of Management. Mr.Tuckman is currently a Vice President at Salomon Brothers Inc.
