Financial Derivatives Principles (SP6) Exam
Learn the main derivative types, how they are priced and valued, and how portfolios of derivatives are managed.
Learning Objectives
4 objectivesDescribe derivative markets, exchange-traded and over-the-counter contracts, and central clearing.
Explain the main derivative types and how they are used, including interest rate, exotic and credit derivatives.
Price and value derivatives using the binomial, Black-Scholes and interest rate models.
Manage a portfolio of derivatives, including the Greeks and basis risk.
Programme Outline
4 topicsDerivative Markets
Characteristics of derivatives markets, exchange-traded and OTC contracts, and central counterparty clearing houses.
Derivative Types and Uses
Payoffs, forwards and futures, hedging, interest rate, exotic, structured and credit derivatives.
Derivative Pricing and Valuation Methods, Including Interest Rate Models
Option price factors, the binomial model, Black-Scholes, numerical methods, and term structure models.
Management of Derivatives
Using derivatives, the Greeks, basis risk and the risks of using derivatives.
Hands-On Resources
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