###### Standard IV (A) – Loyalty

In matters related to their employment, Members and Candidates must act for the... **Read More**

–*a. Describe the carry arbitrage model without underlying cashflows and with underlying cashflows;*

*-f. Describe how currency swaps are priced, and calculate and interpret their no- arbitrage value;*

*-g. Describe how equity swaps are priced, and calculate and interpret their no- arbitrage value.*

*-a. Describe and interpret the binomial option valuation model and its component terms;*

*-c. Identify an arbitrage opportunity involving options and describe the related arbitrage;*

*-d. Calculate and interpret the value of an interest rate option using a two-period binomial model;*

*-f. Identify assumptions of the Black–Scholes–Merton option valuation model;*

*-i. Describe how the Black model is used to value European options on futures;*

*-k. Interpret each of the option Greeks;*

*-l. Describe how a delta hedge is executed;*

*-m. Describe the role of gamma risk in options trading;*

-n. *Define implied volatility and explain how it is used in options trading.*