CFA 2024 SCH L1 B4

2024 CFA Exam Prep Overview

• CFA Exam Provider: Kaplan Schweser

  • Level I Book 4: Focuses on Fixed Income and Derivatives.

Contents Overview

Fixed-Income

• Reading 49: Fixed-Income Instrument Features

  • Key Features: Issuer, Maturity, Principal, Coupon Rate, Seniority, and Contingency Provisions.

• Reading 50: Fixed-Income Cash Flows and Types

  • Cash Flow Structures: Bullet, Amortizing, and Partial Amortizing Structures.

• Reading 51: Fixed-Income Issuance and Trading

  • Market Segmentation and Key Characteristics.

• Reading 52: Fixed-Income Markets for Corporate Issuers

  • Funding Alternatives and Repurchase Agreements.

• Reading 53: Fixed-Income Markets for Government Issuers

  • Funding Choices and Comparative Analysis.

• Reading 54: Fixed-Income Bond Valuation: Prices and Yields

  • Price Calculations and Relationships between Price, Coupon Rate, Maturity, and YTM.

• Reading 55: Yield and Yield Spread Measures for Fixed-Rate Bonds

  • Calculation of Yield Measures.

• Reading 56: Yield and Yield Spread Measures for Floating-Rate Instruments

  • Floating-Rate Notes and Their Features.

• Reading 57: The Term Structure of Interest Rates

  • Concepts of Spot, Par, and Forward Curves.

• Reading 58: Interest Rate Risk and Return

  • Sources of Return and Risk Analysis.

• Reading 59: Yield-Based Bond Duration Measures and Properties

  • Definition and Calculation of Modified Duration and Money Duration.

• Reading 60: Yield-Based Bond Convexity and Portfolio Properties

  • Calculating and Interpreting Convexity.

• Reading 61: Curve-Based and Empirical Fixed-Income Risk Measures

  • Effective Duration and Key Rate Duration Definitions.

• Reading 62: Credit Risk

  • Probability of Default, Loss Given Default, and Credit Assessment Factors.

• Reading 63: Credit Analysis for Government Issuers

  • Factors Affecting Creditworthiness.

• Reading 64: Credit Analysis for Corporate Issuers

  • Qualitative and Quantitative Evaluation Factors.

• Reading 65: Fixed-Income Securitization

  • Structure and Benefits of Securitization.

• Reading 66: Asset-Backed Security Instrument Features

  • Characterization and Risks of Specific ABS Types.

• Reading 67: Mortgage-Backed Security Features

  • Prepayment Risks and Time Tranching.

Derivatives

• Reading 68: Derivative Instruments and Market Features

  • Definition and Features of Derivatives.

• Reading 69: Forward and Futures Contracts

  • Definitions and Differences between Forwards and Futures.

• Reading 70: Derivative Benefits, Risks, and Uses

  • Applications, Advantages, and Risks of Derivatives.

• Reading 71: Arbitrage and Derivatives Pricing

  • No-Arbitrage Pricing Concepts.

• Reading 72: Forward Contract Pricing

  • Valuation Techniques for Forwards.

• Reading 73: Futures Contract Pricing

  • Differences between Forwards and Futures.

• Reading 74: Valuation of Interest Rate Swaps

  • Pricing Mechanism and Swap Characteristics.

• Reading 75: Options Pricing

  • Valuation of Call and Put Options.

• Reading 76: Put-Call Parity and Forward Parity

  • Relationships Defined by Market Conditions.

• Reading 77: One-Period Binomial Model Valuation

  • Application of Binomial Models in Pricing Options.

Key Considerations

• Importance of understanding the relationships among various financial instruments, their volatility, and the external factors influencing market behaviors.

• Emphasis on mastering conceptual definitions, mathematical formulas, and their applications in risk management and investment strategies.

Learning Outcome Statements (LOS)

• Focus on outcomes per reading to guide study efforts in the lead-up to the exam.