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.