2025 CFA Level II Exam: Topic 6. Fixed Income - Learning Module 26. The Term Structure and Interest Rate Dynamics

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	1. The Forward Rate Model describe the assumptions concerning the evolution of spot rates in relation to forward rates implicit in active bond portfolio management; describe the strategy of rolling down the yield curve;
	2. Yield Curve Movement, Forward Curve and Rolling Down the Yield Curve explain the swap rate curve and why and how market participants use it in valuation; calculate and interpret the swap spread for a given maturity; describe short-term interest rate spreads used to gauge economy-wide credit risk and liquidity risk;
	3. The Swap Rate Curve and the Swap Spread explain traditional theories of the term structure of interest rates and describe the implications of each theory for forward rates and the shape of the yield curve;
	4. Traditional Theories of the Term Structure of Interest Rates explain how a bond's exposure to each of the factors driving the yield curve can be measured and how these exposures can be used to manage yield curve risks; explain the maturity structure of yield volatilities and their effect on price volatility.
	5. Yield Curve Factor Models k. explain how key economic factors are used to establish a view on benchmark rates, spreads, and yield curve changes.
	6. Developing Interest Rate Views Using Macroeconomic Variables explain what is meant by arbitrage-free valuation of a fixed-income instrument; calculate the arbitrage-free value of an option-free, fixed-rate coupon bond;

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