BOOK 5 — FIXED INCOME, DERIVATIVES, AND ALTERNATIVE INVESTMENTS Readings and Learning Outcome Statements ...- Study Session 15 — Fixed Income: Basic Concepts... u Study Session 16 ~ Fixed Income: Analysis and Valuation ocsnenecnennenne 8 Self-Test — Fixed Income Investments .....cs.1-++++00 seceusensnessanenssesnvssssesnves 155, Study Session 17 — Derivatives. Study Session 18 ~ Alternative Investments Self-Test ~ Derivatives and Alternative Investment Foemulas... Index...Page 2 SCHWESERNOTES™ 2011 CFA LEVEL 1 BOOK 5: FIXED INCOME, DERIVATIVES, AND ALTERNATIVE INVESTMENTS ©2010 Kaplan, Inc. All rights reserved. Published in 2010 by Kaplan Schweser, Printed in the United States of America. ISBN: 978-1-4277-2724-4 { 1-4277-2724-4 PPN: 3200-0067 Tf this Book does nor have the hologram with the Kaplan Schwere logo on the back cover, i was distributed without permission of Kaplan Schweser, a Division of Kaplan, Inc. and isin di cof global copyrigh laws. Your asistance in pursuing potential vioacors ofthis law is reat Required CFA Insticuce disclaimer: “CEA® and Chartered Financial Analyst are wademarks owned by CEA Insticuce. CFA Institute (formerly the Association for Investment Management andl Research) does nor endorse, promote, review, or warrant the accuracy of the products or services offered by Kaplan Sehwesee” Certain materials contained within this ext are che copyrighted property of CFA Institute. The fllowing is the copyright disclosure for chese materials: "Copyright, 2011, CFA Institute. Reproduced and ‘republished from 2011 Lesrning Outcome Statements, Level 1, 2, and 3 questions from CFA® Progran) ‘Materials, CFA Institute Standards of Prefesignal Conduct, and CFA Instituees Global Investment Performance Standards with permission from CFA Institute, All Rights Reserved.” ‘These materials may not be copied withous written permission from the author. The unauthorized duplication of shese note isa violation of global capyright laws and the CFA Institute Code of Echics Your asisrance in pursuing potential violators of this law is greadly appreciate. Disclaimer: The SchweserNoxes should be used in conjunction with the original ceadings as se: forth by (CFA Institute in their 2011 CEA Level 1 Study Guide. The information contained in chese Notes covers topics contained in che readings refzrenced by CEA Institute and is believed to be accurate. Howeves, their accuracy cannor be guaranteed nor is any warranty conveyed as to your ultimage exam suceess, The authors of the refereuced readings have not endorsed or sponsored these Nove. ©2010 Kaplan, Ine.READINGS AND LEARNING OUTCOME STATEMENTS READINGS The following material is a review of the Fixed Income, Derivatives, and Alternative Investments principles designed to address the learning outcome statements set forth by CFA Institute. STUDY SESSION 15 Reading Assignments Equity and Fixed Income, CFA Program Curticulum, Volume 5 (CFA Institute, 2011) G1. Features of Debt Securities page 11 62, Risks Associated with Investing in Bonds page 24 63. Overview of Bond Sectors and Instruments page 45 64, Understanding Yield Spreads page 67 STUDY SESSION 16 Reading Assignments Equity and Fixed Income, CFA Program Custiculum, Volume 5 (CFA Institute, 2011) 65. Introduction to the Valuation of Debt Securities page 84 66. Yield Measures, Spot Rates, and Forward Rates page 98 67. Introduction to the Measurement of Interest Rate Risk page 132 STUDY SESSION 17 Reading Assignments Derivatives and Alternative Investments, CFA Program Curriculum, Volume 6 (CFA Institute, 2041} 68. Derivative Markets and Instruments page 160 69. Forward Markets and Contracts page 166 70. Futures Markets and Contracts page 181 71. Option Markets and Contracts page 193 72. Swap Markets and Contracts page 221 73. Risk Management Applications of Option Strategies page 235 STUDY SESSION 18 Reading Assignments Derivatives and Alternative Investments, CFA Program Curticahum, Volume 6 (CFA Institute, 2011) 74, Alternative Investments page 245 75. Investing in Commodities page 277 ©2010 Kaplan, Ine Page 3