APSN CFA 2013 Level 1 Study Session Derivative Investments

by Sam Gottlieb

Derivatives—financial instruments that offer a return based on the return of some underlying asset—have become increasingly important and fundamental in effectively managing financial risk and creating synthetic exposures to asset classes. As in other security markets, arbitrage and market efficiency play a critical role in establishing prices and maintaining parity. This study session builds the conceptual framework for understanding derivative investments (forwards, futures, options, and swaps), derivative markets, and the use of options in risk management.

69 pages, Kindle Edition

First published October 2, 2012