This comprehensive CFA® Level I (2025) Derivatives study guide offers a complete breakdown of all key derivative instruments tested on the CFA exam. Spanning 148 pages, the material has been carefully structured and reviewed by a passed candidate to provide focused, exam-relevant summaries.
The content explores derivative markets and instruments, including their features, risks, and uses by both issuers and investors. It introduces critical pricing concepts such as arbitrage, replication, and the cost-of-carry, followed by practical valuation methods for forwards, futures, interest rate swaps, options, and more.
Topics covered include:
- Derivative Instrument and Market Features
- Forward Commitments & Contingent Claims
- Issuer/Investor Use of Derivatives and Risk Considerations
- Arbitrage Pricing, Cost of Carry, and Replication Models
- Forward and Futures Valuation Models
- Swap Valuation, Including Interest Rate Swaps
- Options Valuation and Payoff Structures
- Put-Call Parity and Option Replication Strategies
- One-Period Binomial Model Applications in Option Pricing
Each chapter simplifies complex topics such as the binomial model, option Greeks, and swap pricing into digestible explanations with examples. These notes are ideal for CFA candidates aiming to master quantitative topics under time pressure.
This material aligns closely with the CFA Institute’s curriculum objectives and is particularly useful for reinforcing concepts in practice questions and mock exams. Whether reviewing derivatives for the first time or doing your final prep, this document is a highly efficient companion for the 2025 CFA Level I exam.
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