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

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