{"id":34794,"date":"2023-11-15T12:19:45","date_gmt":"2023-11-15T12:19:45","guid":{"rendered":"https:\/\/analystprep.com\/study-notes\/?p=34794"},"modified":"2024-03-19T07:10:48","modified_gmt":"2024-03-19T07:10:48","slug":"study-notes-for-cfa-level-iii-derivatives-and-currency-management-offered-by-analystprep","status":"publish","type":"post","link":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/study-notes-for-cfa-level-iii-derivatives-and-currency-management-offered-by-analystprep\/","title":{"rendered":"Study Notes for CFA\u00ae Level III \u2013 Derivatives and Currency Management \u2013 offered by AnalystPrep"},"content":{"rendered":"

Reading 17: Options Strategies<\/h2>\n

Los 17 a: Demonstrate how an asset\u2019s returns may be replicated by using options<\/a><\/p>\n

Los 17 b: Discuss the investment objective(s), structure, payoff, risk(s), value at expiration, profit, maximum profit, maximum loss, and breakeven underlying price at expiration of a covered call position<\/a><\/p>\n

Los 17 c: Discuss the investment objective(s), structure, payoff, risk(s), value at expiration, profit, maximum profit, maximum loss, and the breakeven underlying price at expiration of a protective put position<\/a><\/p>\n

Los 17 d: Compare the delta of covered call and protective put positions with the position of being long an asset and short a forward on the underlying asset<\/a><\/p>\n

Los 17 e: Compare the effect of buying a call on a short underlying position with the effect of selling a put on a short underlying position<\/a><\/p>\n

Los 17 f: Discuss the investment objective(s), structure, payoffs, risk(s), value at expiration, profit, maximum profit, maximum loss, and the breakeven underlying price at expiration of the following option strategies: bull spread, bear spread, straddle, and collar<\/a><\/p>\n

Los 17 g: Describe uses of calendar spreads<\/a><\/p>\n

Los 17 h: Discuss volatility skew and smile<\/a><\/p>\n

Los 17 i: Identify and evaluate appropriate option strategies consistent with given investment objectives<\/a><\/p>\n

Los 17 j: Demonstrate the use of options to achieve targeted equity risk exposures<\/a><\/p>\n

Reading 18: Swaps, Forwards and Futures Strategies<\/h2>\n

Los 18 a: Demonstrate how interest rate swaps, forwards, and futures can be used to modify a portfolio's risk and return<\/a><\/p>\n

Los 18 b: Demonstrate how currency swaps, forwards, and futures can be used to modify a portfolio's risk and return<\/a><\/p>\n

Los 18 c: Demonstrate how equity swaps, forwards, and futures can be used to modify a portfolio’s risk and return<\/a><\/p>\n

Los 18 d: Demonstrate the use of volatility derivatives and variance swaps<\/a><\/p>\n

Los 18 e: Demonstrate the use of derivatives to achieve targeted equity and interest rate risk exposures<\/a><\/p>\n

Los 18 f: Demonstrate the use of derivatives in asset allocation, rebalancing, and inferring market expectations<\/a><\/p>\n

Reading 3: Currency Management: An Introduction<\/h2>\n

Los 3 a: Analyze the effects of currency movements on portfolio risk and return<\/a><\/p>\n

Los 3 b: Discuss strategic choices in currency management<\/a><\/p>\n

Los 3 c: Formulate an appropriate currency management program given financial market conditions and portfolio objectives and constraints<\/a><\/p>\n

Los 3 d: Compare active currency trading strategies based on economic fundamentals, technical analysis, carry-trade, and volatility trading<\/a><\/p>\n

Los 3 e: Describe how changes in factors underlying active trading strategies affect tactical trading decisions<\/a><\/p>\n

Los 3 f: Describe how forward contracts and FX (foreign exchange) swaps are used to adjust hedge ratios<\/a><\/p>\n

Los 3 g: Describe trading strategies used to reduce hedging costs and modify the risk-return characteristics of a foreign-currency portfolio<\/a><\/p>\n

Los 3 h: Describe the use of cross-hedges, macro-hedges, and minimum-variance-hedge ratios in portfolios exposed to multiple foreign currencies<\/a><\/p>\n

Los 3 i: Discuss challenges for managing emerging market currency exposures<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Reading 17: Options Strategies Los 17 a: Demonstrate how an asset\u2019s returns may be replicated by using options Los 17 b: Discuss the investment objective(s), structure, payoff, risk(s), value at expiration, profit, maximum profit, maximum loss, and breakeven underlying price…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[571],"tags":[],"class_list":["post-34794","post","type-post","status-publish","format-standard","hentry","category-cfa-level-iii","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"\nStudy Notes for CFA\u00ae Level III \u2013 Derivatives and Currency Management \u2013 offered by AnalystPrep - CFA, FRM, and Actuarial Exams Study Notes<\/title>\n<meta name=\"description\" content=\"Explore various learning objectives (Los) from CFA Level III related to options strategies, swaps, forwards, futures strategies, and currency management.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/study-notes-for-cfa-level-iii-derivatives-and-currency-management-offered-by-analystprep\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Study Notes for CFA\u00ae Level III \u2013 Derivatives and Currency Management \u2013 offered by AnalystPrep - 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