1
Q
Valuing a call option (binomial tree)
A
Value = hS_up - C_up = hS_d - C_d
Where h is the hedge ratio
2
Q
Risk neutral pricing
A
Probability of moving up:
(1 + R - D) / (U - D)
CFA Level 1
flashcards
Decks in class (89)
# Cards
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1 Rates and Returns14
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2 Time Value of Money15
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3 Statistical Measures of Assets14
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4 Probability Trees2
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5 Portfolio Mathematics8
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6 Simulation Methods7
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7 Estimate and Inference16
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8 Hypothesis Testing19
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9 Parametric and non-parametric5
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10 Simple Linear Regression22
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11 Introduction to Big Data24
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12 Firms and Market Structures28
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13 Business Cycles23
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14 Fiscal Policy27
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15 Monetary Policy16
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16 Geopolitics18
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17 International Trade17
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18 Capital Flows and FX20
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19 Exchange Rate Calculations3
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20 Organizational Forms12
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21 Investors and other stakeholders15
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22 Corporate Governance9
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23 Liquidity Measures and Management14
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24 Capital investments14
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25 Capital Structures14
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26 Business Models11
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27 Introduction to financial statements23
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28 Analyzing Income Statements30
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29 Analyzing Balance Sheets18
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30 Analyzing statement of cashflows Pt18
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31 Analyzing Cash Flows Pt219
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32 Analysis of Inventories15
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33 Analysis of Long-Term Assets22
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34 Topics of Long-Term Liabilities28
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35 Analysis of Taxes26
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36 Financial reporting quality24
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37 Financial Analysis Techniques59
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38 Introduction to financial statement modeling8
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39 Market Organization and Structure34
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40 Security Market Indexes19
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41 Market Efficiency18
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42 Overview of Equity Securities24
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43_44 Company Analysis36
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45 Company Analysis18
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46 Equity Valuation42
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47 Fixed income instruments12
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48 Fixed Income Cash Flows15
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49 Fixed-Income Issuance and Trading9
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50 Fixed Income Market for Corporate Issuers9
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51 Fixed Income Markets for Government Issuers6
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52 Fixed Income Bond Valuation5
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53 Yield for Fixed-Rate Bonds18
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54 Yields for Floating Rate5
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55 Term Structure of Interest Rates2
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56 Interest Rate Risk and Return7
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57 Yield Based Bond Duration8
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58 Yield Based Bond Convexity7
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59 Curve Based and Empirical Measures7
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60 Credit Risk11
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61 Credit Analysis for Government Issuers2
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62 Credit Analysis for Corporate Issuers8
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63 Fixed Income Securitization8
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64 Asset Backed Security16
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65 Mortgage Backed Security23
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66 Derivative Instruments and Market Features2
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67 Forward Commitment8
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68 Derivative Benefits7
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69 Arbitrage3
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70 Pricing and Valuation of Forwards3
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71 Pricing and Valuation of Futures Contracts2
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72 Valuation of Swaps2
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73 Pricing and Valuation of Options5
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74 Option Replication Using Put Call Parity4
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75 Binomal model2
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76 Alternative Investment Features16
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78 Investments in Private Capital12
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79 Real Estate and Infrastructure11
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80 Natural Resources9
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81 Hedge Funds9
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82 Introduction to Digital Assets18
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83 Portfolio Management5
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84 Portfolio Risk and Return 218
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85_86 Portfolio Management31
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87 Behavioral Biases of Individuals31
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88 Introduction to Risk Management20
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89 Ethics and Trust6
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90 Code of Ethical Standard12
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91 Guidance for Standards41
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92 Introduction to GIPS5
