2025 CFA Level II Exam: Topic 7. Derivatives - Learning Module 32. Valuation of Contingent Claims

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	1. One-Period Binomial Model describe and interpret the binomial option valuation model and its component terms; describe how the value of a European option can be analyzed as the present value of the option's expected payoff at expiration;
	2. Two-Period Binomial Model calculate the no-arbitrage values of European and American options using a two-period binomial model; identify an arbitrage opportunity involving options and describe the related arbitrage;
	3. Interest Rate Options calculate and interpret the value of an interest rate option using a two-period binomial model;
	4. Black-Scholes-Merton Option Valuation Model identify assumptions of the Black-Scholes-Merton option valuation model; interpret the components of the Black-Scholes-Merton model as applied to call options in terms of a leveraged position in the underlying; describe how the Black-Scholes-Merton model is used to value European options on equities and currencies;
	5. Black Option Valuation Model describe how the Black model is used to value European options on futures; describe how the Black model is used to value European interest rate options and European swaptions;
	6. Option Greeks and Implied Volatility interpret each of the option Greeks; describe how a delta hedge is executed; describe the role of gamma risk in options trading; define implied volatility and explain how it is used in options trading.

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