2024 CFA© Program Curriculum Level I Volume 5 Derivatives, Alternative Investments

✍ Scribed by CFA Institute

• Publisher: CFA Institute
• Year: 2024
• Tongue: English
• Leaves: 454
• Category: Library

✦ Table of Contents

How to Use the CFA Program Curriculum
Errata
Designing Your Personal Study Program
CFA Institute Learning Ecosystem (LES)
Feedback
Derivatives
Learning Module 1 Derivative Instrument and Derivative Market Features
Introduction
Derivative Features
Definition and Features of a Derivative
Derivative Underlyings
Equities
Fixed-Income Instruments
Currencies
Commodities
Credit
Other
Investor Scenarios
Derivative Markets
Over-the-Counter (OTC) Derivative Markets
Exchange-Traded Derivative (ETD) Markets
Central Clearing
Investor Scenarios
Practice Problems
Solutions
Learning Module 2 Forward Commitment and Contingent Claim Features and Instruments
Introduction
Forwards, Futures, and Swaps
Futures
Swaps
Options
Scenario 1: Transact (ST > X)
Scenario 2: Do Not Transact (ST < X)
Credit Derivatives
Forward Commitments vs. Contingent Claims
Practice Problems
Solutions
Learning Module 3 Derivative Benefits, Risks, and Issuer and Investor Uses
Introduction
Derivative Benefits
Derivative Risks
Issuer Use of Derivatives
Investor Use of Derivatives
Practice Problems
Solutions
Learning Module 4 Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
Introduction
Arbitrage
Replication
Costs and Benefits Associated with Owning the Underlying
Learning Module 5 Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities
Introduction
Pricing and Valuation of Forward Contracts
Pricing versus Valuation of Forward Contracts
Pricing and Valuation of Interest Rate Forward Contracts
Interest Rate Forward Contracts
Practice Problems
Solutions
Learning Module 6 Pricing and Valuation of Futures Contracts
Introduction
Pricing of Futures Contracts at Inception
MTM Valuation: Forwards versus Futures
Interest Rate Futures versus Forward Contracts
Forward and Futures Price Differences
Interest Rate Forward and Futures Price Differences
Effect of Central Clearing of OTC Derivatives
Practice Problems
Solutions
Learning Module 7 Pricing and Valuation of Interest Rates and Other Swaps
Introduction
Swaps vs. Forwards
Swap Values and Prices
Practice Problems
Solutions
Learning Module 8 Pricing and Valuation of Options
Introduction
Option Value relative to the Underlying Spot Price
Option Exercise Value
Option Moneyness
Option Time Value
Arbitrage
Replication
Factors Affecting Option Value
Value of the Underlying
Exercise Price
Time to Expiration
Risk-Free Interest Rate
Volatility of the Underlying
Income or Cost Related to Owning Underlying Asset
Practice Problems
Solutions
Learning Module 9 Option Replication Using Put–Call Parity
Introduction
Put–Call Parity
Option Strategies Based on Put–Call Parity
Put–Call Forward Parity and Option Applications
Put–Call Forward Parity
Option Put–Call Parity Applications: Firm Value
Practice Problems
Solutions
Learning Module 10 Valuing a Derivative Using a One-Period Binomial Model
Introduction
Binomial Valuation
The Binomial Model
Pricing a European Call Option
Risk Neutrality
Practice Problems
Solutions
Alternative Investments
Learning Module 1 Alternative Investment Features, Methods, and Structures
Introduction
Alternative Investment Features
Alternative Investments: Features and Categories
Private Capital
Real Assets
Hedge Funds
Alternative Investment Methods
Alternative Investment Methods
Fund Investment
Co-Investment
Direct Investment
Alternative Investment Structures
Alternative Investment Ownership and Compensation Structures
Ownership Structures
Compensation Structures
Practice Problems
Solutions
Learning Module 2 Alternative Investment Performance and Returns
Introduction
Alternative Investment Performance
Alternative Investment Performance Appraisal
Comparability with Traditional Asset Classes
Performance Appraisal and Alternative Investment Features
Alternative Investment Returns
Alternative Investment Returns
Alternative Investment Return Calculations
Relative Alternative Investment Returns and Survivorship Bias
Practice Problems
Solutions
Learning Module 3 Investments in Private Capital: Equity and Debt
Introduction
Private Equity Investment Characteristics
Private Equity Investment Categories
Private Equity Exit Strategies
Risk–Return from Private Equity Investments
Private Debt Investment Characteristics
Private Debt Categories
Risk–Return of Private Debt
Diversification Benefits of Private Capital
Practice Problems
Solutions
Learning Module 4 Real Estate and Infrastructure
Introduction
Real Estate Features
Real Estate Investments
Real Estate Investment Structures
Real Estate Investment Characteristics
Source of Returns
Real Estate Investment Diversification Benefits
Infrastructure Investment Features
Infrastructure Investments
Infrastructure Investment Characteristics
Infrastructure Diversification Benefits
Practice Problems
Solutions
Learning Module 5 Natural Resources
Introduction
Natural Resources Investment Features
Land Investments vs. Real Estate
Features and Forms of Farmland and Timberland Investment
Commodity Investment Forms
Commodity Investment Features
Distinguishing Characteristics of Commodity Investments
Basics of Commodity Pricing
Natural Resource Investment Risk, Return, and Diversification
Commodities
Farmland and Timberland
Inflation Hedging and Diversification Benefits of Natural Resource Investments
Practice Problems
Solutions
Learning Module 6 Hedge Funds
Introduction
Hedge Fund Investment Features
Equity Hedge Fund Strategies
Event-Driven Strategies
Relative Value Strategies
Opportunistic Strategies
Distinguishing Characteristics of Hedge Fund Investments
Hedge Fund Investment Forms
Direct Hedge Fund Investment Forms
Indirect Hedge Fund Investment Forms
Hedge Fund Investment Risk, Return, and Diversification
Hedge Fund Investment Risks and Returns
Diversification Benefits of Hedge Fund Investments
Practice Problems
Solutions
Learning Module 7 Introduction to Digital Assets
Introduction
Distributed Ledger Technology
Proof of Work vs. Proof of Stake
Permissioned and Permissionless Networks
Types of Digital Assets
Digital Asset Investment Features
Distinguishing Characteristics of Digital Assets
Investible Digital Assets
Digital Asset Investment Forms
Direct Digital Asset Investment Forms
Indirect Digital Asset Investment Forms
Digital Forms of Investment for Non-Digital Assets
Digital Asset Investment Risk, Return, and Diversification
Digital Asset Investment Risks and Returns
Diversification Benefits of Digital Asset Investments
Practice Problems
Solutions
Glossary