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Title: CFA Level 2 - Derivatives
Description: I create this summary of knowledge related to CFA level 2 for my 2018 June exam. I got into the top 10% with this. Hope this can help you. Please note that this does not guarantee for your pass, which requires dedication, hardwork and consistency. In case having trouble with any part, please refer to CFA notebook/Schwesser. I also understand that there were several changes in curriculum since then. At this moment, I did not update the note accordingly. Please be aware of that.
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Concepts

Description

Forward contracts

Pricing and Valuation of Forward Commitments
Long forward position (Long) : Party to the forward contract agrees to buy the financial / physical asset
Short forward position (Short) : Party to the forward contract agrees to sell the financial / physical asset

No-arbitrage principle

Price of the forward contract : contract prce of the underlying asset of the forward contract
...
Payoff will only occur at the expiraation of the FRA (Payoff is the PV of interest savings on the loan)
E
...
: 1x4 FRA (90-day loan, 30 days from now) - Interest is paid at the end of the loan (day 120); payoff occurs at the expiration of the FRA (day 30)
Price of FRA : (AxB FRA)

1+π‘Ÿ
π‘ƒπ‘Ÿπ‘–π‘π‘’
𝐴 Γ— 𝐡 𝐹𝑅𝐴
Value of
FRA π‘œπ‘“
at Maturity
: = 1+π‘Ÿ βˆ’1
πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘ π‘Žπ‘£π‘–π‘›π‘” π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴 π‘Žπ‘‘ 𝑒𝑛𝑑 π‘œπ‘“ π‘™π‘œπ‘Žπ‘› π‘‘π‘’π‘Ÿπ‘š = [π΄π‘π‘‘π‘’π‘Žπ‘™ π‘–π‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘Ÿπ‘Žπ‘‘π‘’ βˆ’(π‘ƒπ‘Ÿπ‘–π‘π‘’ π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴)] Γ— π‘π‘œπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘π‘Ÿπ‘–π‘›π‘π‘–π‘π‘Žπ‘™
π‘‰π‘Žπ‘™π‘’π‘’ π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴 π‘Žπ‘‘ π‘šπ‘Žπ‘‘π‘’π‘Ÿπ‘–π‘‘π‘¦ = (πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘ π‘Žπ‘£π‘–π‘›π‘” π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴 π‘Žπ‘‘ 𝑒𝑛𝑑 π‘œπ‘“ π‘™π‘œπ‘Žπ‘› π‘‘π‘’π‘Ÿπ‘š) Γ— 1 + π΄π‘π‘‘π‘’π‘Žπ‘™ π‘–π‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘Ÿπ‘Žπ‘‘π‘’
Value of FRA before Maturity :
πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘ π‘Žπ‘£π‘–π‘›π‘” π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴 = π‘ƒπ‘Ÿπ‘–π‘π‘’ π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴
βˆ’ π‘ƒπ‘Ÿπ‘–π‘π‘’ π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴
π‘‰π‘Žπ‘™π‘’π‘’ π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴 = 𝑃𝑉 π‘œπ‘“ π‘–π‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘ π‘Žπ‘£π‘–π‘›π‘” π‘œπ‘“ 𝐴 Γ— 𝐡 𝐹𝑅𝐴
Currency forward contracts
T : 365 days basis

Γ— π‘π‘œπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘π‘Ÿπ‘–π‘›π‘π‘–π‘π‘™π‘’

Currency forward price : risk-free rate return in home country = Bought 1 unit of foreign currency @ Spot rate + Invest @ foreign risk-free rate + Exchange the proceeds of the investment
at maturity @ Forward price

πΉπ‘œπ‘Ÿπ‘€π‘Žπ‘Ÿπ‘‘ π‘π‘Ÿπ‘–π‘π‘’ = π‘†π‘π‘œπ‘‘ π‘π‘Ÿπ‘–π‘π‘’ Γ—

1+π‘Ÿ
1+π‘Ÿ

Forward price and Spot price are quoted as : Price currency/Base currency
Value of Currency forward contracts after initiation :

𝑉 =

πΉπ‘œπ‘Ÿπ‘€π‘Žπ‘Ÿπ‘‘ π‘π‘Ÿπ‘–π‘π‘’ βˆ’ πΉπ‘œπ‘Ÿπ‘€π‘Žπ‘Ÿπ‘‘ π‘π‘Ÿπ‘–π‘π‘’ π‘Žπ‘‘ π‘–π‘›π‘π‘’π‘π‘‘π‘–π‘œπ‘› Γ— πΆπ‘œπ‘›π‘‘π‘Ÿπ‘Žπ‘π‘‘ 𝑠𝑖𝑧𝑒
1+π‘Ÿ

Future contracts

Future contracts : are marked to market by clearinghouse
Mark to market : Adjusting the margin balance in a future account each day for the change in the value of the contract from the previous trading day, based on the settlement price
Value of future contract = Current future price - Previous market-to-market price

Interest rate swap

Interest rate swap : swap fixed rate to floating rate
Initiation of the swap : choose fixed rate β†’ PV of floa ng payments = PV of fixed-rate payments
After initiation : floating rate changes β†’ value of swap of 1 party is posi ve, value of swap of the other party is nega ve
Computing swap fixed rate:
- Step 1 : Computing discount factor (Z)
1
𝑍=
π‘‘π‘Žπ‘¦π‘ 
1 + 𝐿𝐼𝐡𝑂𝑅 Γ—
360

T : 360 days basis

- Step 2 : Computing periodic swap fixed rate
1 βˆ’ πΏπ‘Žπ‘ π‘‘ 𝑍
π‘ƒπ‘’π‘Ÿπ‘–π‘œπ‘‘π‘–π‘ π‘ π‘€π‘Žπ‘ 𝑓𝑖π‘₯𝑒𝑑 π‘Ÿπ‘Žπ‘‘π‘’ =
βˆ‘π‘
- Step 3 : Annual swap fixed rate = Periodic swap fixed rate Γ— Number of settlement periods per year
Computing MV of interest rate swap:

π‘‰π‘Žπ‘™π‘’π‘’ π‘‘π‘œ π‘π‘Žπ‘¦π‘’π‘Ÿ =
Currency swap
T : 360 days basis
Equity swap
T : 360 days basis

π‘…π‘’π‘šπ‘Žπ‘–π‘›π‘–π‘›π‘” 𝑛𝑒𝑀 𝑍 Γ— π΄π‘›π‘›π‘’π‘Žπ‘™ 𝑆𝐹𝑅

βˆ’ π΄π‘›π‘›π‘’π‘Žπ‘™ 𝑆𝐹𝑅

Γ—

π·π‘Žπ‘¦π‘  π‘‘π‘œ π‘π‘™π‘œπ‘ π‘’π‘ π‘‘ π‘ π‘’π‘‘π‘‘π‘™π‘’π‘šπ‘’π‘›π‘‘
Γ— π‘π‘œπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘π‘Ÿπ‘–π‘›π‘π‘–π‘π‘™π‘’
360

Currency swap : swap fixed rate loan in Currency A with fixed rate loan in Currency B
Calculating interest rate of currency swap : similar to interest rate swap
Value of currency swap after initiation = PV of CF expected to receive - PV of CF obligated to pay
Equity swap :
(1) swap fixed rate payments with return from equity index, or
(2) swap equity return with equity return
Calculating fixed interest rate of equity swap : similar to interest rate swap

Concepts
Binominal model

Description
Valuation of Contingent Claims
Binominal model : based on the idea that, over the next period, the value of an asset will change to one of two possible values
Calculation of probabilities of an up-move and down-move :
1+π‘Ÿ βˆ’π·
πœ‹ =
π‘ˆβˆ’π·
Steps to calculate value of option on stock :
- Step 1 : Calculate the payoff of the option at maturity in up-move / down-move states
- Step 2 : Calculate expected value of the option in 1 year as weighted average of the payoffs in up-move and down-move
- Step 3 : Discount back to today at risk-free rate

Put-Call parity

Put-call parity : Value of fiduciary call (long call + investment in zero-coupon bond with face value equal strike price) = Value of protective pt (long stock + long put)
𝑆 + 𝑃 = 𝐢 + 𝑃𝑉(𝑋)

Two-period binominal model

Method to value option using two-period binominal model:
- Step 1 : Calculate stock values @ end of 2 periods
- Step 2 : Calculate 3 possible option payoffs @ end of 2 periods
- Step 3 : Calculate expected option payoffs @ end of 2 periods using up-move / down-move probabilities
- Step 4 : Discount expected option payoffs to end of the first period, using risk-free rate
- Step 5 : Calculate expected option value @ end of 1 period using up-move / down-move probabilities
- Step 6 : Discount expected option value to PV, using risk-free rate

American-style option

Deep-in-the-money put option could benefit from early exercise

Arbitrage opportunity with oneperiod binominal model

Market price of option β‰  calculated value from binominal model β†’ arbitrage opportunity
- Call option is overpriced : sell call option + buy fractional share
- Call option is underpriced : purchase call option + sell fractional share
Calculation of fractional share needed for the arbitrage trae (hedge ratio) :
𝐢 βˆ’πΆ
β„Ž=
𝑆 βˆ’π‘†

Interest rate options

Interest rate option : financial derivative, that allows the holder to benefits from the changes in interest rate
- Interest rate call option : positive payoff when actual interest rate > Exercise rate (interest rate call option value increases when interest rate increases)
- Interest rate put option : positive payoff when actual interest rate < Excercise rate (interest rate put option value increases when interest rate decreases)

Black-Scholes-Merton option
valuation model

1
...
Return on underlying asset follow lognormal distribution
- risk free rate is constant and known
...
Continuous trading is possible
...
Value of a call option on an (M x N) FRA can be calculated as
⁄

Γ—

𝐢 = 𝐴𝑃 Γ— 𝑒

Γ— 𝐹𝑅𝐴

Γ—

×𝑁 𝑑

βˆ’π‘‹Γ—π‘ 𝑑

Γ— π‘π‘œπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘π‘Ÿπ‘–π‘›π‘π‘–π‘π‘Žπ‘™

𝐴𝑃 = π‘Žπ‘π‘π‘Ÿπ‘’π‘Žπ‘™ π‘π‘’π‘Ÿπ‘–π‘œπ‘‘ = π΄π‘π‘‘π‘’π‘Žπ‘™ ⁄365
Equivalencies:
- Long FRA = Long interest rate call + Short interest rate put (exercise rate = current FRA rate)
- Short FRA = Short interest rate call + Long interest rate put (exercise rate = current FRA rate)
- Interest rate cap = series of interest rate call with different maturities and same exercise price
- Interest rate floor = series of interest rate put with different maturities and same exercise price
- Payer swap = long cap + short floor (exercise rate on cap = exercise rate on floor)
- Exercise rate on floor = exercise rate on cap = market swap fixed rate β†’ value on cap = value on floor
Black model for valuation of
Swaption

Swaption : option that gives the holder the right to enter into interest rate swap
Payer swaption : fixed-rate payer (receive float)
Receiver swaption : fixed-rate receiver (pay float)
Swaption = option on series of CF (annuity) @ each settlement date of the underlying swap that equal to difference between exercise rate on swaption and market swap fixed rate

π‘ƒπ΄π‘Œ = 𝐴𝑃 Γ— 𝑃𝑉𝐴 Γ— 𝑆𝐹𝑅 Γ— 𝑁 𝑑 βˆ’ 𝑋 Γ— 𝑁 𝑑 Γ— π‘π‘œπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘π‘Ÿπ‘–π‘›π‘π‘–π‘π‘Žπ‘™
𝑅𝐸𝐢 = 𝐴𝑃 Γ— 𝑃𝑉𝐴 Γ— 𝑋 Γ— 𝑁 βˆ’π‘‘ βˆ’ 𝑆𝐹𝑅 Γ— 𝑁 βˆ’π‘‘ Γ— π‘π‘œπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘π‘Ÿπ‘–π‘›π‘π‘–π‘π‘Žπ‘™
In which:
π‘ƒπ΄π‘Œ = π‘π‘Žπ‘¦π‘’π‘Ÿ π‘ π‘€π‘Žπ‘π‘‘π‘–π‘œπ‘›
𝑅𝐸𝐢 = π‘Ÿπ‘’π‘π‘’π‘–π‘£π‘’π‘Ÿ π‘ π‘€π‘Žπ‘π‘‘π‘–π‘œπ‘›
𝐴𝑃 = 1β„π‘π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘ π‘’π‘‘π‘‘π‘™π‘’π‘šπ‘’π‘›π‘‘ π‘π‘’π‘Ÿπ‘–π‘œπ‘‘π‘ π‘π‘’π‘Ÿ π‘¦π‘’π‘Žπ‘Ÿ π‘œπ‘“ π‘‘β„Žπ‘’ π‘’π‘›π‘‘π‘’π‘Ÿπ‘™π‘¦π‘–π‘›π‘” π‘ π‘€π‘Žπ‘
𝑆𝐹𝑅 = π‘π‘’π‘Ÿπ‘Ÿπ‘’π‘›π‘‘ π‘šπ‘Žπ‘Ÿπ‘˜π‘’ π‘ π‘€π‘Žπ‘ 𝑓𝑖π‘₯𝑒𝑑 π‘Ÿπ‘Žπ‘‘π‘’
𝑙𝑛 𝑆𝐹𝑅 ⁄𝑋 + 𝜎 ⁄2 Γ— 𝑇
𝑑 =
πœŽΓ— 𝑇
𝑑 =𝑑 βˆ’πœŽΓ— 𝑇
Equivalencies
- Receiver swap = Long receiver swaption + Short payer swaption (same exercise rates)
- Payer swap = Short receiver swaption + Long payer swaption (same exercise rates)
- If exercise rate is set so that values of payer swaption = values of receiver swaption β†’ exercise rate - market swap fixed rate
- Long callable bond = option-free bond + short receiver swaption

Option Greeks

Greeks : sensitivity that capture the relationship between each input and the option price
- Inputs : asset price, exercise price, asset price volatility, time to expiration, risk-free rate
- Greeks :
+ Delta : relationship between changes in asset price and changes in option price
+ Gamma : capture the curvature of option value vs
...
stock price relationship β†’ the rate of change in delta
Long position in calls and puts : positive gamma
- Short option β†’ lower gamma
- Long option β†’ increase gamma
Gamma is highest for at-the-money options
Gamma is low for deep-in-the-money or deep-out-of-money
βˆ†πΆ = π·π‘’π‘™π‘‘π‘Ž Γ— βˆ†π‘† + 1 2 Γ— πΊπ‘Žπ‘šπ‘šπ‘Ž Γ— βˆ†π‘†
βˆ†π‘ƒ = π·π‘’π‘™π‘‘π‘Ž Γ— βˆ†π‘† + 1 2 Γ— πΊπ‘Žπ‘šπ‘šπ‘Ž Γ— βˆ†π‘†

Option Greeks - Vega

Vega : measure the sensitivity of the option price to changes in volatility of returns on underlying asset
Higher volatility β†’ Increase value f call / put op on β†’ posi ve vega for both call / put

Option Greeks - Rho

Rho : measure the sensitivity of the option price to change in risk-free rate
(*) Price of European call / put option does not change mch if use different inpts for risk-free rate

Option Greeks - Theta

Theta : sensitivity of option price to passage of time
Call / Put option approach maturity β†’ decrease spcula ve vaulue β†’ call / put value decrease (except for deep-in-the-money put op ons, that might increase value as me passes)

Delta Hedge

Delta-neutral portfolio (delta-neutral hedge) : long stock position + short call (or long put) option position β†’ value of por olio does not change as stock price changes
π‘›π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘ β„Žπ‘Žπ‘Ÿπ‘’π‘  β„Žπ‘’π‘‘π‘”π‘’π‘‘
π‘π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘ β„Žπ‘œπ‘Ÿπ‘‘ π‘π‘Žπ‘™π‘™ 𝑛𝑒𝑒𝑑𝑒𝑑 π‘“π‘œπ‘Ÿ π‘‘π‘’π‘™π‘‘π‘Ž β„Žπ‘’π‘‘π‘”π‘’ =
π‘‘π‘’π‘™π‘‘π‘Ž π‘œπ‘“ π‘π‘Žπ‘™π‘™ π‘œπ‘π‘‘π‘–π‘œπ‘›
π‘›π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘ β„Žπ‘Žπ‘Ÿπ‘’π‘  β„Žπ‘’π‘‘π‘”π‘’π‘‘
π‘π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘™π‘œπ‘›π‘” 𝑝𝑒𝑑 𝑛𝑒𝑒𝑑𝑒𝑑 π‘“π‘œπ‘Ÿ π‘‘π‘’π‘™π‘‘π‘Ž β„Žπ‘’π‘‘π‘”π‘’ =
π‘‘π‘’π‘™π‘‘π‘Ž π‘œπ‘“ 𝑝𝑒𝑑 π‘œπ‘π‘‘π‘–π‘œπ‘›

Gamma risk

Gamma risk : risk that stock price might suddenly jump, leaving delta-hedged portfolio unhedged

Implied volaility

Implied volatility : standard deviation of continuously compounded asset return, that is implied by market price of the option
Usage :
- gauge market perceptions
- Use as mechanism to quote option prices

Concepts
Interest rate swaps

Description
Derivatives Strategies
Interest rate swaps : use to modify the duration of fixed-income portfolio
Value of payer swap = Value of floating rate note - Value of fixed rate bond
β†’ Dura on of payer swap = Dura on of floa ng rate note - Dura on of fixed rate bond
β†’ Dura on of receiver swap =Dura on of fixed rate bond - Dura on of floa ng rate note

Interest rate futures

Futures contracts : not subject to counter partyrisk β†’ could be used to modify por olio's dura on
E
...
: In case of declining interest rate :
- Long bond futures β†’ increase por olio's dura on
- Short bond futures β†’ decrease por olio's dura on

Currency swaps

Currency swaps : used by parties that have relative advantage in borrowing in their own capital markets as opposed to capital market of the currency they want to borrow

Currency futures / forward

Currency futures / forward : used to hedge an asset / liabiity in a foreign currency that is expected to be settled in the future

Equity swaps

Equity swaps : exchange of return on an equity index for return on another asset β†’ temporary reduce exposure to stock market return without liquida ng their holding

Stock index futures

Stock index futures : can be used to change the exposure of equities in a portfolio

Replicate asset by using Options /
Cash + forward or futures

1
...
Syntheic puts and calls : Long call = Long stock + Long put
Similarly : Long put = short stock + Long call
3
...
Foreign currency options : used to hedge existing asset / liability denominated in foreign currency
Covered call = Long stock + short call β†’ give up the upside of the stock, but earn income via op on premium
Investment objectives :
- Income generation : accrue additional income by writing out-of-the-money call options
- Improving on the market : can potentially get a better price by using covered call than sell the stock
- Target price realisation : Set the target price for the seller + earn extra return in form of premium
Payoff and profit :

Covered call - investment
objectives, structure, payoff and
risks

πΌπ‘›π‘£π‘’π‘ π‘‘π‘šπ‘’π‘›π‘‘ @ π‘–π‘›π‘π‘’π‘π‘‘π‘–π‘œπ‘› = 𝑆 βˆ’ 𝐢
π‘‰π‘Žπ‘™π‘’π‘’ @ 𝑒π‘₯π‘π‘–π‘Ÿπ‘Žπ‘‘π‘–π‘œπ‘› = 𝑆 βˆ’ π‘šπ‘Žπ‘₯ 0; 𝑆 βˆ’ 𝑋
π‘ƒπ‘Ÿπ‘œπ‘“π‘–π‘‘ @ 𝑒π‘₯π‘π‘–π‘Ÿπ‘Žπ‘‘π‘–π‘œπ‘› = 𝑆 βˆ’ π‘šπ‘Žπ‘₯ 0; 𝑆 βˆ’ 𝑋 βˆ’ 𝑆 βˆ’ 𝐢 = π‘šπ‘–π‘› 𝑋; 𝑆
π‘€π‘Žπ‘₯ π‘”π‘Žπ‘–π‘› = 𝑋 βˆ’ 𝑆 βˆ’ 𝐢
π‘€π‘Žπ‘₯ π‘™π‘œπ‘ π‘  = 𝑆 βˆ’ 𝐢
π΅π‘Ÿπ‘’π‘Žπ‘˜π‘’π‘£π‘’π‘› π‘π‘œπ‘–π‘›π‘‘ = 𝑆 βˆ’ 𝐢
Risk : retain the downside, while sacrifice the upside of the stock
Protective put - investment
objectives, structure, payoff and
risks

βˆ’ 𝑆 βˆ’πΆ

Protective put = Long stock + long put β†’ provide protec on on the downside by paying premium
Payoff and profit :
πΌπ‘›π‘£π‘’π‘ π‘‘π‘šπ‘’π‘›π‘‘ @ π‘–π‘›π‘π‘’π‘π‘‘π‘–π‘œπ‘› = 𝑆 + 𝑃
π‘‰π‘Žπ‘™π‘’π‘’ @ 𝑒π‘₯π‘π‘–π‘Ÿπ‘Žπ‘‘π‘–π‘œπ‘› = π‘šπ‘Žπ‘₯ 𝑆 ; 𝑋
π‘ƒπ‘Ÿπ‘œπ‘“π‘–π‘‘ @ 𝑒π‘₯π‘π‘–π‘Ÿπ‘Žπ‘‘π‘–π‘œπ‘› = π‘šπ‘Žπ‘₯ 𝑆 ; 𝑋 βˆ’ 𝑆 + 𝑃
π‘€π‘Žπ‘₯ π‘”π‘Žπ‘–π‘› = 𝑆 βˆ’ 𝑆 + 𝑃
π‘€π‘Žπ‘₯ π‘™π‘œπ‘ π‘  = 𝑆 + 𝑃 βˆ’ 𝑋
π΅π‘Ÿπ‘’π‘Žπ‘˜π‘’π‘£π‘’π‘› = 𝑆 + 𝑃
Risk : Premium reduce total portfolio return
...

Investment objectives

Investor will select option strategy that is consistent with their investment objectives + expectations of market condition and future volatility
- Strong bullish sentiment β†’ long calls
- Strong bearish sentiment β†’ long puts
- Average bullish sentiment β†’ Long calls + short puts
- Average bearish sentiment β†’ Short calls + Long puts
- Weak bullish sentiment β†’ short puts
- Weak bearish sentiment β†’ short calls
- High future volatility β†’ long straddle
- Long future volatility β†’ short straddle

Breakeven price analytics

The breakeven price can be used to calculate the volatility needed to earn neither a profit nor a loss

𝜎
%βˆ†π‘ƒ =

= %βˆ†π‘ƒ Γ—

252
π‘‘π‘Ÿπ‘Žπ‘‘π‘–π‘›π‘” π‘‘π‘Žπ‘¦π‘  𝑒𝑛𝑑𝑖𝑙 π‘šπ‘Žπ‘‘π‘’π‘Ÿπ‘–π‘‘π‘¦

π΅π‘Ÿπ‘’π‘Žπ‘˜π‘’π‘£π‘’π‘› π‘π‘Ÿπ‘–π‘π‘’ βˆ’ π‘π‘’π‘Ÿπ‘Ÿπ‘’π‘›π‘‘ π‘π‘Ÿπ‘–π‘π‘’
π‘π‘’π‘Ÿπ‘Ÿπ‘’π‘›π‘‘ π‘π‘Ÿπ‘–π‘π‘’

Title: CFA Level 2 - Derivatives
Description: I create this summary of knowledge related to CFA level 2 for my 2018 June exam. I got into the top 10% with this. Hope this can help you. Please note that this does not guarantee for your pass, which requires dedication, hardwork and consistency. In case having trouble with any part, please refer to CFA notebook/Schwesser. I also understand that there were several changes in curriculum since then. At this moment, I did not update the note accordingly. Please be aware of that.
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