Valuation of Contingent Claims: Part I - Binomial Pricing (2024 Level II CFA® Exam -Module 2)

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Topic 7 - Derivatives
Module 2- Valuation of Contingent Claims: Part I - Binomial Pricing
0:00 Introduction and Learning Outcome Statements
5:30 LOS: Describe and interpret the binomial option valuation model and its component terms.
23:06 LOS: Calculate the no-arbitrage values of European and American options using a two-period binomial model.
38:12 LOS: Identify an arbitrage opportunity involving options and describe the related arbitrage.
49:44 LOS: Calculate and interpret the value of an interest rate option using a two-period binomial model.
54:21 LOS: Describe how the value of a European option can be analyzed as the present value of the option’s expected payoff at expiration.

[@Akshay_tiwari_ak]

Thank you Professor for putting this up😃

[@joelmartin82]

For these more complex decks, I think you need a way to point out specific items on the slide while discussing. All verbal is harder to follow on a static deck. I've watched 100% of the L1 videos and all the L2 up to here.

[@analystprep]

Thank you for your input. We'll do our best to highlight things in post-production moving forward!

[@andrebravo2020]

I believe reading 37 is Pricing and Valuation of Forward Commitments. Valuation of contingent claims is reading 38 i think you jumped one?

[@lwc888]

Yeah I couldn't find Reading 37 either.

[@analystprep]

We have to take care of a few CFA Level updates for 2022 and then we'll get back to CFA Level II video lessons. All videos will be live before the February exam for sure!

[@ASMRGEMSTON]

May I ask why we only look at how to arbitrage an overpriced call option but not underpriced call option as well as put option scenario ? Please

[@omaralmamlouk]

The arbitrage here is just a theory under the assumptions that the price will be between 25 and 16... But in reality, nothing is guaranteed, right?

[@mansimohta3397]

will you upload a video on Reading 37 too?

[@analystprep]

Yes, soon. We have to take care of a few CFA Level updates and then we'll get back to CFA Level II Video lessons. Before the February exam for sure!

[@charliebracken454]

Is this the last available reading?

[@analystprep]

Hi Charlie. We have to take care of a few CFA Level updates and then we'll get back to CFA Level II Video lessons. All videos will be live before the February exam for sure!

[@foodlosspreventor5048]

Dam i hate this chapter