Immersion Learning

Two Day Fixed Income Intensive Makes Debut

by Nicholas Baker, MBA ‘15 (2/6/14)
Nicholas Baker, MBA ‘15

The Investment Banking Immersion had just started off at a solid pace, with our Week on Wall Street.  So, “with what did we follow up such a start to the year?” I hear you asking.  “A mid-winter indoor luau or toga party to celebrate returning to school?”  Whilst our elation at having returned from boring family holidays was palpable, there happens to be no better way to celebrate than a two day Fixed Income (FI) Intensive to clear our heads.

The rationale for capping off our week of big-city adventures in such a way is twofold.  First, the fixed income market (for bonds, notes and bills) dwarfs the equities market (its more famous cousin) by order of magnitude, which means if you want a job in finance its probably prudent to know a couple of things about it.  Second, since almost all functions my classmates and I will be entering involve some aspect of raising or refinancing debt, spending a couple of days on the subject might be a useful idea.

Cornell’s Professor Moulton hosted the two days.  A former MD and Global Co-Head of relative value research at Deutsche Bank, she seemed a little over-qualified to host such a party.  However, once we kicked off the course with the basics, Bond Pricing, we all quickly realized the value of being taught by someone of such extensive experience.

From bond pricing, the course progressed into hedging interest rate risk, the repo market, leverage, yield curves, interest rate swaps, and credit ratings.  Like many of my classmates, I have had very limited experience with the mechanics of the bond market, and even less experience with the repo market.  The FI Intensive is a new addition to Investment Banking Immersion this year, and without a doubt a valuable exercise to quickly bring the class to a base level of understanding on an important topic.  Are we experts on the topic now? Of course not, but will anyone look blankly at a VP when asked to calculate yields on a client’s 10 year bonds this summer?  So long as it’s not the morning after that luau, we’ll be ok.