Reading 42. Introduction to Commodities and Commodity Derivatives
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Learning Outcome Statements
|Reading 42. Introduction to Commodities and Commodity Derivatives|
|1. Characteristics of Commodity Sectors|
a. compare characteristics of commodity sectors;
|2. Life Cycle of Commodities|
b. compare the life cycle of commodity sectors from production through trading or consumption;
|3. Valuation of Commodities|
c. contrast the valuation of commodities with the valuation of equities and bonds;
|4. Commodity Futures Market Participants|
d. describe types of participants in commodity futures markets;
|5. Spot and Futures Pricing|
e. analyze the relationship between spot prices and expected future prices in markets in contango and markets in backwardation;
|6. Futures Returns|
f. compare theories of commodity futures returns;
g. describe, calculate, and interpret the components of total return for a fully collateralized commodity futures contract;
h. contrast roll return in markets in contango and markets in backwardation;
|7. Commodity Swaps and Indexes|
i. describe how commodity swaps are used to obtain or modify exposure to commodities;
j. describe how the construction of commodity indexes affects index returns.