CFA Level 2: Derivatives Part 1 – Introduction

Welcome to derivatives.  This is the first of two modules on derivatives, covering forward and futures contracts.  Candidates will need to know:

  • The similarities (such as pricing) between forwards and futures;
  • The differences (such as value) between forwards and futures;
  • How to price and value forwards and futures; and
  • Basic the characteristics of forwards and futures.

When approaching derivatives, it is important that the candidate understand both the formulas as well as the concepts behind them.

Forwards and futures are a good way to wade into derivatives, as the material gets more complex in session two.  Pricing any type of forward or future is done with the same base formula, but cash flows may vary by underlying asset.  Never forget that forwards accumulate positive or negative value, but futures are reset to a value of zero every day. Lastly, candidates must understand the qualitative differences between futures and forwards.

Candidates can reasonably expect two item sets (twelve questions), drawn from both derivatives sessions.

This module aligns with Study Session 16 material in the Level II CFA Program Curriculum ©.

Data Science in Finance: 9-Book Bundle

Data Science in Finance Book Bundle

Master R and Python for financial data science with our comprehensive bundle of 9 ebooks.

What's Included:

  • Getting Started with R
  • R Programming for Data Science
  • Data Visualization with R
  • Financial Time Series Analysis with R
  • Quantitative Trading Strategies with R
  • Derivatives with R
  • Credit Risk Modelling With R
  • Python for Data Science
  • Machine Learning in Finance using Python

Each book includes PDFs, explanations, instructions, data files, and R code for all examples.

Get the Bundle for $39 (Regular $57)
JOIN 30,000 DATA PROFESSIONALS

Free Guides - Getting Started with R and Python

Enter your name and email address below and we will email you the guides for R programming and Python.

Data Science in Finance: 9-Book Bundle

Data Science in Finance Book Bundle

Master R and Python for financial data science with our comprehensive bundle of 9 ebooks.

What's Included:

  • Getting Started with R
  • R Programming for Data Science
  • Data Visualization with R
  • Financial Time Series Analysis with R
  • Quantitative Trading Strategies with R
  • Derivatives with R
  • Credit Risk Modelling With R
  • Python for Data Science
  • Machine Learning in Finance using Python

Each book comes with PDFs, detailed explanations, step-by-step instructions, data files, and complete downloadable R code for all examples.