COURSE NUMBER: MBA237.1

COURSE TITLE: Fixed Income

UNITS OF CREDIT: 2.0

INSTRUCTOR: Randy Wedding

E-MAIL ADDRESS: randolph_wedding@haas.berkeley.edu

PREREQUISITE(S): MBA203

CLASS FORMAT:  Lectures, exercises. case study

REQUIRED READINGS: Textbook and course reader

BASIS FOR FINAL GRADE: Midterm and final exams, exercises, class participation.

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: Fixed Income has long been regarded as the boring stepchild in the family of investments compared to its more glamorous siblings, equity and alternatives. However, market professionals and students of MBA 237 Fixed Income understand that the party doesn’t get started without fixed income and the ability to leverage.

While the course is firmly grounded in a quantitative and analytical approach, as a practitioner, I will endeavor to place our subject matter in the relevant real world context.  Each lecture will begin with a discussion of current market/economic conditions and how they relate to the topic at hand. For example, the discussion on leveraged finance will cover not just the structure and credit analysis of a typical high yield bond or bank loan but also real-time investment decision making relating to an LBO currently in the market.

We will survey the basics of fixed income; terminology, security types, debt and money markets. We then move into the valuation of cash flows, the term structure of interest rates and the modeling of credit risk. Building on that foundation, we examine the unexpectedly key role fixed income plays in the global financial system, other asset classes and derivatives.

(N.B. This course is not intended to be a preparation for the fixed income portion of the CFA exam, but there is substantial overlap with that material.)

CAREER FIELD: This course is relevant for any field where leverage is an important part of the value creation process, such as commercial real estate or private equity. Of course, someone who aims for an investment management career in fixed income has to take this class!

BIOGRAPHICAL SKETCH: Randy Wedding is the Senior Managing Director of Fixed Income in the Office of the Chief Investment Officer, Regents of the University of California. In that role, he is responsible for the active management of $26 billion of fixed income assets in pension, endowment and defined contribution portfolios. Assets under management range from money market securities, U.S. Treasuries and investment-grade corporates to high yield and emerging market bonds. He also served as Acting Chief Investment Officer from 7/2013 to 4/2014. His prior experience includes several years in portfolio management at Wells Fargo Bank and in the trading/sales of interest rate derivatives and foreign currency options, for Morgan Stanley, Bear Stearns and Bank of America. He earned his MBA in Finance from the University of California, Berkeley, and BA in mathematics from the University of California, San Diego.