Pricing and Valuation of Forward Contracts – Module 5 – Derivatives – CFA® Level I 2025

Download PDF Now: https://www.finquiz.com/cfa/level-1/summary/ 2025 Prep Packages for the CFA® Program exam offered by FinQuiz Pro (notes, summaries, question bank, mock exams, and formula sheet): Level I: https://www.finquiz.com/cfa/level-1/ Level II: https://www.finquiz.com/cfa/level-2/ Level III: https://www.finquiz.com/cfa/level-3/ 1. 0:00 - Introduction to Forward Contracts Keywords: CFA Level I, forward contracts, pricing vs valuation, CFA 2025, financial derivatives. Description: Introduction to the topic of forward contracts, their importance in the CFA Level I 2025 curriculum, and an overview of what will be covered in the session. 2. 0:42 - Pricing vs Valuation of Forward Contracts Keywords: pricing forward contracts, valuation of forward contracts, CFA derivatives, mark to market (MTM). Description: Explanation of the difference between pricing and valuation of forward contracts, including the concept of mark-to-market (MTM) value and how it changes over time. 3. 2:30 - Pricing Forward Contracts Keywords: forward pricing formula, risk-free rate, spot price, CFA exam prep. Description: Detailed explanation of how forward contracts are priced using the spot price and risk-free rate, with examples to illustrate the concept. 4. 3:22 - Valuation of Forward Contracts Over Time Keywords: forward contract valuation, contract life, expiration value, CFA Level I derivatives. Description: Discussion of how the value of a forward contract changes from initiation to expiration, including examples of gains and losses. 5. 4:44 - Forward Contracts with Underlying Asset Benefits Keywords: forward contracts with dividends, convenience yield, storage costs, CFA curriculum. Description: Explanation of how benefits (e.g., dividends) and costs (e.g., storage fees) affect the pricing and valuation of forward contracts. 6. 7:14 - Currency Forwards Keywords: currency forwards, interest rate differential, CFA Level I 2025, foreign exchange. Description: Introduction to currency forwards, including how interest rate differentials between domestic and foreign currencies impact forward pricing. 7. 8:42 - Interest Rate Forward Contracts Keywords: interest rate forwards, zero coupon bonds, bootstrapping, CFA exam 2025. Description: Explanation of interest rate forward contracts, zero coupon bonds, and the bootstrapping method to derive spot rates. 8. 11:43 - Forward Rates and Implied Forward Rates Keywords: forward rates, implied forward rates, CFA Level I, interest rate derivatives. Description: Discussion of forward rates, implied forward rates, and their role in pricing interest rate derivatives. 9. 13:50 - Forward Rate Agreements (FRAs) Keywords: forward rate agreements, FRAs, interest rate hedging, CFA curriculum. Description: Explanation of forward rate agreements (FRAs), how they work, and their use in hedging against interest rate changes. 10. 16:37 - Real-Life Applications of Forward Contracts Keywords: forward contracts in business, hedging with forwards, CFA Level I examples. Description: Real-life examples of how forward contracts are used in business, including hedging against future price and interest rate changes. 11. 20:30 - Case Study: Coffee Shop Expansion Keywords: forward rate agreements in business, interest rate hedging, CFA Level I case study. Description: A practical case study of a coffee shop using forward rate agreements to hedge against rising interest rates for a future loan. 12. 23:39 - Conclusion and CFA Exam Tips Keywords: CFA exam prep, CFA Level I 2025, FinQuiz resources, mock exams, formula sheet. Description: Summary of key concepts covered in the video, along with tips for CFA exam preparation and resources offered by FinQuiz. Master the Pricing and Valuation of Forward Contracts in this comprehensive video tailored for CFA® Level I 2025 candidates. This tutorial covers Module 5 of the CFA curriculum, focusing on the mechanics of forward contracts, forward pricing models, and valuation techniques. Whether you're preparing for the CFA exam or seeking to strengthen your understanding of financial derivatives, this video provides clear explanations, practical examples, and step-by-step guidance on forward contract basics, hedging strategies, and financial risk management. Ideal for CFA aspirants and finance professionals aiming to excel in derivative instruments and forward rate agreements. Don’t miss this essential guide to CFA Level I 2025 topics!