SCHWESERNOTES™ 2024 FRM® PART I BOOK 3: FINANCIAL MARKETS AND PRODUCTS

Contents
Readings and Learning Objectives
Reading 27 Banks
	Exam Focus
	Module 27.1: Banks
	Key Concepts
	Answer Key for Module Quizzes
Reading 28 Insurance Companies and Pension Plans
	Exam Focus
	Module 28.1: Insurance Companies and Pension Plans
	Key Concepts
	Answer Key for Module Quizzes
Reading 29 Fund Management
	Exam Focus
	Module 29.1: Mutual Funds and Exchange-Traded Funds
	Module 29.2: Hedge Funds
	Key Concepts
	Answer Key for Module Quizzes
Reading 30 Introduction to Derivatives
	Exam Focus
	Module 30.1: Derivatives Markets and Securities
	Module 30.2: Derivatives Traders
	Key Concepts
	Answer Key for Module Quizzes
Reading 31 Exchanges and OTC Markets
	Exam Focus
	Module 31.1: Exchange-Traded Derivatives
	Module 31.2: Over-the-Counter Derivatives
	Key Concepts
	Answer Key for Module Quizzes
Reading 32 Central Clearing
	Exam Focus
	Module 32.1: Principles of Central Clearing
	Module 32.2: Risks Faced by Central Counterparties
	Key Concepts
	Answer Key for Module Quizzes
Reading 33 Futures Markets
	Exam Focus
	Module 33.1: Futures Characteristics
	Module 33.2: Futures Markets
	Key Concepts
	Answer Key for Module Quizzes
Reading 34 Using Futures for Hedging
	Exam Focus
	Module 34.1: Principles of Hedging
	Module 34.2: Hedging With Stock Index Futures
	Key Concepts
	Answer Key for Module Quizzes
Reading 35 Foreign Exchange Markets
	Exam Focus
	Module 35.1: Foreign Exchange Quotes and Risks
	Module 35.2: Interest Rates, Inflation, and Exchange Rates
	Key Concepts
	Answer Key for Module Quizzes
Reading 36 Pricing Financial Forwards and Futures
	Exam Focus
	Module 36.1: Forward and Futures Prices
	Key Concepts
	Answer Key for Module Quizzes
Reading 37 Commodity Forwards and Futures
	Exam Focus
	Module 37.1: Fundamentals of Commodities
	Module 37.2: Pricing Commodity Forwards
	Key Concepts
	Answer Key for Module Quizzes
Reading 38 Options Markets
	Exam Focus
	Module 38.1: Option Types, Positions, and Underlying Assets
	Module 38.2: Option Specification and Trading
	Key Concepts
	Answer Key for Module Quizzes
Reading 39 Properties of Options
	Exam Focus
	Module 39.1: Option Pricing Factors
	Module 39.2: Upper and Lower Option Pricing Bounds
	Key Concepts
	Answer Key for Module Quizzes
Reading 40 Trading Strategies
	Exam Focus
	Module 40.1: Protective Puts, Covered Calls, and Principal Protected Notes
	Module 40.2: Option Spread Strategies
	Module 40.3: Option Combination Strategies
	Key Concepts
	Answer Key for Module Quizzes
Reading 41 Exotic Options
	Exam Focus
	Module 41.1: Exotic Option Development
	Module 41.2: Types of Exotic Options
	Key Concepts
	Answer Key for Module Quizzes
Reading 42 Properties of Interest Rates
	Exam Focus
	Module 42.1: Types of Interest Rates
	Module 42.2: Spot Rates, Forward Rates, and Forward Rate Agreements
	Module 42.3: Duration and Convexity
	Key Concepts
	Answer Key for Module Quizzes
Reading 43 Corporate Bonds
	Exam Focus
	Module 43.1: Corporate Bond Fundamentals and Types
	Module 43.2: Credit Risk, Event Risk, and High-Yield Bonds
	Key Concepts
	Answer Key for Module Quizzes
Reading 44 Mortgages and Mortgage-Backed Securities
	Exam Focus
	Module 44.1: Mortgage Loans
	Module 44.2: Mortgage-Backed Securities
	Module 44.3: Prepayment Modeling
	Key Concepts
	Answer Key for Module Quizzes
Reading 45 Interest Rate Futures
	Exam Focus
	Module 45.1: Day Count Conventions and Quotations
	Module 45.2: Treasury Bond and Eurodollar Futures
	Module 45.3: Duration-Based Hedging
	Key Concepts
	Answer Key for Module Quizzes
Reading 46 Swaps
	Exam Focus
	Module 46.1: Mechanics of Interest Rate Swaps
	Module 46.2: Valuation of Interest Rate Swaps
	Module 46.3: Other Types of Swaps
	Key Concepts
	Answer Key for Module Quizzes
Formulas
Index