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Derivatives

Forwards, futures, swaps and options: what they are, how they are used, and how they are priced by no-arbitrage reasoning.

Exam weight: 5–8% · 71 questions in the full bank · 8 study modules

Practice Derivatives

Study modules

• Derivative Instrument and Market Features (14)
• Forward Commitments and Contingent Claims (14)
• Derivative Benefits, Risks, and Uses (7)
• Arbitrage, Replication, and Cost of Carry (7)
• Pricing and Valuation of Forwards and Futures (9)
• Pricing and Valuation of Swaps (6)
• Pricing and Valuation of Options; Put-Call Parity (8)
• One-Period Binomial Model (6)

Free sample questions

• The one-year forward price of Ordway Timber stock is quoted at $54.10, while its one-year no-arbitrage…
• A trader goes long one gasoline futures contract at $2.4600 per gallon; the contract size is 42,000 gallons.…
• A dealer quotes a six-month put option on Halstead Mining at a premium of $4.20. Halstead shares trade at…
• Meridian Commercial Bank holds a $10 million senior loan to a distressed packaging maker and buys five-year…
• A pension fund enters a three-year equity swap in which, each quarter, it pays the total return on the…

Questions are original, unofficial practice material. They are not CFA Institute questions.