Binomial Option Valuation Model
One-Period Binomial Option Valuation Model In the one-period binomial model, we start today (at time t=0) when the stock price is \(S_{0}\). Then, the stock price can either jump upwards or downwards over the one-period time interval to t=1. This…
Study Notes for CFA® Level II – Derivatives – offered by AnalystPrep
Reading 37: Pricing and Valuation of Forward Commitments -a. Describe and compare how equity, interest rate, fixed-income, and currency forward and futures contracts are priced and valued; –b. Calculate and interpret the no-arbitrage value of equity, interest rate, fixed-income, and…
Pricing and Valuation of Interest Rate Swaps
Swaps are typically derivative contracts in which two parties exchange (swap) cash flows or other financial instruments over multiple periods for a give-and-take benefit, usually to manage risk. Both swap contract parties have future obligations. Thus, similar to forwards and…
Pricing and Valuation Concepts
A forward commitment is a derivative contract that allows one to buy or sell an underlying security at a predetermined price at a future date. The price of a forward or a futures contract is the prespecified price that the…
