Learn everything about Derivatives required for the CFALevel 1. The topics included are - Derivative Markets and Instruments, Basics of Derivative Pricing and Valuation. It has concepts, calculations, exam tips and tricks and questions and doubts by students. Recording in 2021. Need to have BA II plus calculator with you. You can also use this lecture for your 2022 exam preparations.

Derivatives introduction :
Meaning and Uses

Structure and Markets

Forward Contracts :

Types of Forward commitments

Meaning of Forward Contracts

Settlement of Forward Contracts

Futures Contracts :

Meaning of Futures Contracts

Settlement of Futures Contracts

Futures Margin & Futures Price Limit

Swaps :

Meaning of Swap

Plain Vanilla Swap

Swap Settlement

FRA :

Forward Contracts on Interest rates

Credit Derivatives & Types:

Total return swap

Credit spread options

Credit linked note

Credit default swap

Benefits and Criticism of Derivatives

Arbitrage :

Arbitrage and its role in Derivative pricing

Hedging and Arbitrage in Derivatives

Derivatives Pricing

• Basics of Derivatives Pricing

• Arbitrage and Replication

• The Concept of Pricing vs. Valuation

• Benefit and cost of holding the Underlying asset

Pricing and Valuation

• Forward Contracts

• Futures Contracts

• Swap Contracts

Contingent Claims: Options

• Long Call

• Short Call

• Long Put

• Short Put

• Comparison of Options

Option Valuation

• Moneyness of Option

• Valuation (Premium) of Option

• Factors that determine the value of an option

Parity

• Put Call Parity with Spot

• Put Call Parity with Forward

• Rearranging PCP

Option Pricing Model: Binomial Option pricing model

European vs American Option pricing difference

Subjects - Level 1

Weightage

Average Questions

Ethics

15-20%

32

Quantitative Methods

8-12%

18

Economics

8-12%

18

Financial Reporting and Analysis

13-17%

27

Corporate Finance

8-12%

18

Equity Investments

8-12%

18

Fixed Income Investments

10-12%

20

Derivative Investments

5-8%

12

Alternative Investments

5-8%

12

Portfolio Management

5-8%

12