Derivative Markets and Instruments

CFA level I / Derivatives / Derivative Markets and Instruments

Learning Outcome Statements

1. Exchange-traded and over-the-counter derivatives
a. define a derivative and distinguish between exchange-traded and over-the-counter derivatives;

2. Forward commitments and contingent claims
b. contrast forward commitments with contingent claims;

3. Definition and characteristics of derivative instruments
c. define forward contracts, futures contracts, options (calls and puts), swaps, and credit derivatives and compare their basic characteristics;

4. Purposes of and controversies related to derivatives
d. describe purposes of, and controversies related to, derivative markets;

5. Arbitrage and its role in market efficiency and price determination
e. explain arbitrage and the role it plays in determining prices and promoting market efficiency.

Derivative Markets and Instruments: Chapter Test
6 Questions, 9 Minutes