786
Seminars - Stage3b
Note: After Stage 2, most people would only need to do Stage
3a, 3b or 3c - not all of them.
After completing Stage 2, those who wish to proceed further can choose to attend
Level 1 seminars for -
Stage 3b: Investment Banking Calculations
Level 1: Six 1-hour sessions;
Level 2: Six 1-hour sessions;
Level 3: Six 1-hour sessions.
The investment banking calculations course will build upon the stage 2
course and introduce students to
different methods and calculation formulae of various financial instruments as
used by investment banks around the world in their day-to-day business.
It will
use the 12 calculation models and rates environment models for present value,
yield and discount factor calculations.
Some of the investment banking and risk management business terms covered in
AZMAT System are as follows:
cash flows; discount factors; yield; present value;
internal rate of return; accrued interest; average life; equivalent life; yield
to maturity; redemption yield; duration; modified duration; convexity; simple
margin; discounted margin; bonds (with call, put, sinking funds, partly-paid,
graduated rate); zero coupon bonds; perpetual; asset swaps; floating rate notes;
convertible bonds; bond warrants; equity warrants; money market instruments such
as treasury bills, fixed rate certificates of deposit and floating rate
certificates of deposit; volatilities; correlations; cash flow maps; and
principal maps.
The meanings of some of the above terms can
be explained, for the benefit of those who do not know them, in just a sentence
or two; some terms can be calculated by just formulae in spreadsheet cells,
while others require extensive calculations utilising several intermediate
spreadsheets and hundreds of lines of program code to find the required results.
Similarly, asset swaps are just two words in the above list, but the
Asset Swap Model in AZMAT System is the most comprehensive of all our
calculation models with its own menus and specific commands, and in the right
hands (of a bond dealer in an investment bank) it could be a money-making
machine! In an earlier trading system that the author of AZMAT System had
developed for an international investment bank, the Asset Swap Model was being
used around the world by the bond traders of that bank about 85% of their
working time every single working day. When comparing the functionality of the
Asset Swap Model in AZMAT System with that earlier model is like comparing a
Rolls-Royce car with a basic family saloon car.
It should be stressed, however, that the course will cover the business terms
as shown above only to the extent as they are used in various calculation models
of the system.
However, the teacher will show the actual calculation formulae of
all the instruments used in all the financial models that have been checked for
accuracy with working examples.
The objective of this course is to give the students sufficient in-depth working
knowledge of various formulae and how financial calculations are carried out.
For example, it takes only 2 or 3 seconds after the user selects a command to
calculate present value, 11 types of redemption yield for a bond, internal rate
of return or discount factors if all the required parameters are valid.
However, how several financial models and program sub-routines are used behind
the scenes to carry out various checks and calculations before the results are
presented to the user, in seconds.
This course will attempt to cover
step-by-step to show what calculations are needed in order to arrive at the
required results.
Similarly, where the results are calculated automatically in certain financial
models as soon as any input value is changed by the user, this course will show
the actual formulae that are used in both foreground and background
calculations.
Thus the students can appreciate what they would need to do
when they are designing and developing financial models to carry out various
tasks.
For example, which calculations to perform in the foreground, which
in the background, which via program sub-routines and which dynamically.
Those who wish to take this course should ideally first take stage 3a,
financial systems design and development course, if they are interested in that
course as well.
However, they can take this course immediately after
stage 2 if they are not interested in stage 3a course.
This is
a specialist course and will only be offered if there is sufficient demand.
However, those who learn the subject matter should gain detailed knowledge of
the calculation formulae and of various financial instruments that are used by
the investment banks.
This specialist working knowledge should help the students
enhance their career prospects in an investment bank.
Stage3c
Seminars - Stage3b
AZMAT System
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