derivatives — CFA Level I Practice Questions

33 free CFA Level I questions on derivatives: 6 easy, 19 medium, and 8 hard, every one exam-realistic and fully explained once you sign in. This is the fastest way to turn derivatives from a weakness into a scoring area — drill it in 10-question reps with immediate feedback.

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1. In the context of the 2027 CFA curriculum, why is 'stationarity' considered a fragility of historical simulati
2. Meridian Pack stock is at 80. A one-year European put with K = 80 is 4.50. The risk-free rate is 5% (r = 0.05)
3. Vesper Foods stock is at 60. A European call with K = 55 is 8.00. A European put with K = 55 is 2.00. If PV(K)
4. According to the put-call parity relationship c + Ke^-rT = p + S_0, which of the following is an accurate desc
5. Under IFRS, interest received and dividends received are both categorized as having the same classification op
6. If an investor borrows the price currency, converts it to the base currency at the spot rate, and invests the
7. Aether Energy sells a 9 × 12 FRA with a notional of 100,000,000 at a rate of 4.80%. At settlement, the 90-day
8. Meridian Pack has issued a bond that is both callable and putable. At very high interest rate levels, the effe
9. Vesper Foods issues a bond with a 'Call' feature. Compared to an identical 'Option-free' bond, the callable bo
10. A portfolio manager at Meridian Pack identifies a 'Disposition Effect' in a client's trading history. To mitig
11. Oakridge Capital holds a short position in a 5 × 8 FRA for 100,000,000 at 4.20%. At settlement, the 90-day ref
12. Oakridge Capital notices that the 270-day forward rate for EUR/USD is 1.1200. The spot rate is 1.1000. If the
13. Helion Rail is the receiver in a 4 × 8 FRA for 50,000,000 at 4.00%. At settlement, the 120-day reference rate
14. Using the put-call parity relationship for European options, an investor can create a synthetic long position
15. Meridian Pack is the receiver in a 5 × 11 FRA for 10,000,000 at 4.00%. If the 180-day reference rate at settle
16. In a one-period binomial model for an option on Oakridge Capital, the stock price S = $50 can either go up to
17. Meridian Pack issues a bond that is 'putable' at the option of the investor. As interest rates rise and approa
18. Vesper Foods enters into a 6 × 12 short FRA with a 25,000,000 notional and a 5.00% contract rate. At the 6-mon
19. Lumina Health sells a 2 × 4 FRA for 22,000,000 at a contract rate of 4.40%. At settlement, the 60-day referenc
20. A stock issued by Meridian Pack is expected to pay a dividend of D_1 = 2.50 next year. The required rate of re
21. Which of the following is the most likely cause?
22. Helion Rail enters a 4 × 10 FRA as the payer (long) for 40,000,000 at a rate of 4.10%. At the end of 4 months
23. Oakridge Capital is evaluating a European call and put on a non-dividend-paying stock trading at 50. Both opti
24. If the note is currently trading at a discount to par, which of the following is most likely true?
25. Solaris Energy observes the USD/EUR spot rate is 1.0800. The one-year risk-free rates are 5.0% in the US and 3
26. Meridian Pack has a complex capital structure. Net income is 500,000, and there are 200,000 common shares outs
27. A portfolio manager at Meridian Pack wants to create a synthetic long stock position using European options an
28. A trader at Meridian Pack observes that a stock is trading at $100, the 1-year risk-free rate is 5%, and a 1-y
29. A 'long' position in a put option by Juniper Health is best described as a:
30. In a futures contract for Kestrel Grid, what happens to the contract value immediately after the daily variati