Prepare for CFA Level 1: Derivatives and Risk Management
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Prepare for CFA Level 1: Derivatives and Risk Management
This course is part of Prepare for CFA Level 1 Exam: Master Core Finance Concepts Specialization
Instructor: Board Infinity
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What you'll learn
Apply pricing and valuation models for forwards, futures, and swaps using cost of carry and arbitrage frameworks
Analyze option value, moneyness, time value, and Greeks to evaluate derivative financial instruments in live markets
Build binomial valuation models and put-call parity frameworks to price European options from first principles
Design real-world derivative strategies for hedging, speculation, and arbitrage using futures, options, and swaps
Details to know
April 2026
13 assignments
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There are 4 modules in this course
Master financial derivatives - forwards, futures, options, swaps, and credit derivatives with the pricing models and market intuition needed for CFA Level 1 and real-world trading.
This intermediate course covers the complete derivatives curriculum: derivative instruments and market structure, forward and futures pricing, swap valuation, options models including binomial valuation, put-call parity, and advanced option strategies. Every lesson combines theory with numerical practice questions mirroring CFA Level 1 difficulty. Top skills you'll gain: β’ Pricing forwards, futures, and swaps using cost of carry β’ Options valuation: intrinsic value, time value, Greeks β’ Binomial model and put-call parity from first principles β’ Arbitrage identification and derivative risk management You'll be able to: β’ Price and value derivative financial instruments confidently β’ Build option strategies for hedging and speculation β’ Identify arbitrage opportunities in derivative markets Module Highlights: M1: Derivative instruments, market structure, and arbitrage basics M2: Forward, futures, and swap pricing and valuation M3: Options pricing, Greeks, and binomial valuation models M4: Option strategies, put-call parity, and capstone application Take this course if you're preparing for CFA Level 1 derivatives, trading futures and options, or building a career in risk management and financial markets. Disclaimer: This course is an independent educational resource developed by Board Infinity and is not affiliated with, endorsed by, sponsored by, or officially associated with CFA Institute or any of its subsidiaries or affiliates. This course is not an official preparation material of CFA Institute. All trademarks, service marks, and company names mentioned are the property of their respective owners and are used for identification purposes only.
This module introduces the fundamentals of derivatives, including their definitions, underlying assets, and market structures. Learners explore the key categories of derivatives such as forwards, futures, swaps, options, and credit derivatives while examining how these instruments function in financial markets. The module also analyzes derivative benefits, risks, and the uses of derivatives by both issuers and investors.
What's included
16 videos5 assignments1 plugin
16 videosβ’Total 181 minutes
- Introductionβ’17 minutes
- Definition and Features of a Derivativeβ’17 minutes
- Derivative Underlyingsβ’15 minutes
- Derivative Marketsβ’11 minutes
- Forwards, Futures, and Swapsβ’8 minutes
- Futuresβ’10 minutes
- Swapsβ’7 minutes
- Optionsβ’17 minutes
- Credit derivativesβ’14 minutes
- Derivative Benefitsβ’12 minutes
- Derivative Risksβ’9 minutes
- Issuer Use of Derivativesβ’6 minutes
- Investor Use of Derivativesβ’8 minutes
- Arbitrageβ’13 minutes
- Replicationβ’6 minutes
- Costs and Benefits of owning the underlyingβ’13 minutes
5 assignmentsβ’Total 180 minutes
- Practice Quiz : β Derivative Featuresβ’30 minutes
- Practice Quiz : β Forward Commitment and Contingent Claimsβ’30 minutes
- Practice Quiz : β Derivative Benefits, Risks, and Issuer and Investor Usesβ’30 minutes
- Practice Quiz : - Arbitrage, Replication, and the Cost of Carryβ’30 minutes
- Graded Quiz : β Derivative Instruments, Features, and Derivative Marketβ’60 minutes
1 pluginβ’Total 5 minutes
- Quick Course Check-Inβ’5 minutes
This module focuses on the pricing and valuation mechanisms used for forward contracts, futures contracts, and interest rate swaps. Learners examine pricing frameworks, mark-to-market valuation processes, and the differences between forwards and futures contracts. The module also explores the impact of interest rates, market structure, and central clearing on derivative pricing.
What's included
8 videos3 assignments
8 videosβ’Total 80 minutes
- Introductionβ’7 minutes
- Pricing and Valuation of Forward Contractsβ’11 minutes
- Pricing and Valuation of Interest Rate Forward Contractsβ’15 minutes
- Pricing of Futures Contracts at Inceptionβ’9 minutes
- MTM Valuation: Forwards versus Futuresβ’8 minutes
- Interest Rate Futures versus Forward Contractsβ’7 minutes
- Effect of Central Clearing of OTC Derivativesβ’10 minutes
- Swap Values and Pricesβ’14 minutes
3 assignmentsβ’Total 120 minutes
- Practice Quiz : β Pricing and Valuation of Forward Contractsβ’30 minutes
- Practice Quiz : β Navigating Interfaces & Core Featuresβ’30 minutes
- Graded Quiz : β Pricing and Valuation of Forward Contracts and Swapsβ’60 minutes
This module introduces option valuation principles and examines the factors influencing option prices. Learners explore concepts such as moneyness, intrinsic value, time value, and arbitrage relationships. The module also introduces the binomial model and risk-neutral valuation techniques used to price European options.
What's included
10 videos3 assignments
10 videosβ’Total 88 minutes
- Option Value relative to the Underlying Spot Priceβ’12 minutes
- Option Exercise Valueβ’7 minutes
- Option Moneynessβ’9 minutes
- Option Time Valueβ’7 minutes
- Replicationβ’6 minutes
- Factors Affecting Option Valueβ’10 minutes
- Binomial Valuationβ’8 minutes
- The Binomial Modelβ’8 minutes
- Pricing a European Call Option *β’13 minutes
- Risk Neutralityβ’8 minutes
3 assignmentsβ’Total 120 minutes
- Practice Quiz : β Pricing and Valuation of Optionsβ’30 minutes
- Practice Quiz : β Valuing a Derivative Using a One-Period Binomial Modelβ’30 minutes
- Graded Quiz :- Pricing and Valuation of Futuresβ’60 minutes
This module examines the relationship between option prices and underlying assets through putβcall parity and replication strategies. Learners explore how parity relationships help identify arbitrage opportunities and construct synthetic positions. The module also analyzes applications of putβcall parity in option strategies and firm valuation contexts.
What's included
4 videos2 assignments
4 videosβ’Total 39 minutes
- PutβCall Parityβ’13 minutes
- Option Strategies Based on PutβCall Parityβ’10 minutes
- PutβCall Parity and Option Applicationsβ’6 minutes
- Option PutβCall Parity Applications: Firm Valueβ’10 minutes
2 assignmentsβ’Total 90 minutes
- Practice Quiz : β Option Replication- Put Call Parityβ’30 minutes
- Graded Quiz : β Option Replication- Put Call Parityβ’60 minutes
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Frequently asked questions
No prior derivatives experience is required, this course is designed for intermediate learners who understand basic financial concepts like time value of money and interest rates, but have never studied futures, options, or swaps formally. We build every concept from the ground up with definitions, worked examples, and numerical practice questions at each step.
This course covers the complete derivatives curriculum aligned with CFA Level 1: forwards, futures, swaps, options (calls and puts), credit derivatives, binomial valuation, put-call parity, arbitrage, cost of carry, and option strategies. Every module is structured around CFA-style theory and numerical questions, making it directly applicable for CFA Level 1 exam preparation in the derivatives topic area.
No specialist software is required. All concepts are taught through video lessons, worked numerical examples, and practice quiz sets accessible directly on the Coursera platform. A scientific calculator or spreadsheet (Excel/Google Sheets) is useful for pricing exercises in Modules 2 and 3, particularly for forward pricing, binomial valuation, and put-call parity calculations.
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