Derivative Instruments: Study Session 13
Study Session Materials
Complete List of CFA Program Readings
Topic Overview
Risk Management Applications of Derivatives
This study session addresses risk management strategies using forwards and futures, option strategies, floors and caps, and swaps. Collectively referred to as derivatives, these investment vehicles can be employed for a variety of risk management purposes, including modification of portfolio duration and beta, implementation of changes in asset allocation, and synthesis of cash market instruments. Derivatives strategies have proven useful to both investors and borrowers, which accounts for their broad appeal. A growing number of security types now have embedded derivatives, and portfolio managers must be able to account for their effect on the return/risk profile of the security. After completing Study Session 13, the practitioner will better understand the advantages and disadvantages of derivative strategies, including the difficulties in creating and maintaining a dynamic hedge.
View learning outcome statements (LOS) for reading objectives.
Complete List of CFA Program Readings
|
Members may download these designated readings. Log in for access. |
|
“Risk Management Applications of Forward and Futures
Strategies” Ch. 6, Analysis of Derivatives for the CFA® Program, Don Chance (AIMR, 2003) Member download (PDF) |
|
View LOS |
|
“Risk Management Applications of Option
Strategies” Ch. 7, Analysis of Derivatives for the CFA® Program, Don Chance (AIMR, 2003) |
View LOS | |
|
“Risk Management Applications of Swap
Strategies” Ch. 8, Analysis of Derivatives for the CFA® Program, Don Chance (AIMR, 2003) Member download (PDF) |
|
View LOS |