- CFA Exams
- 2025 Level II
- Topic 8. Alternative Investments
- Learning Module 33. Introduction to Commodities and Commodity Derivatives
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Learning Outcome Statements PDF Download
1. Characteristics of Commodity Sectors compare the life cycle of commodity sectors from production through trading or consumption; | |
2. Life Cycle of Commodities contrast the valuation of commodities with the valuation of equities and bonds; | |
3. Valuation of Commodities describe types of participants in commodity futures markets; | |
4. Commodity Futures Market Participants analyze the relationship between spot prices and expected future prices in markets in contango and markets in backwardation; | |
5. Spot and Futures Pricing compare theories of commodity futures returns; describe, calculate, and interpret the components of total return for a fully collateralized commodity futures contract; contrast roll return in markets in contango and markets in backwardation; | |
6. Futures Returns describe how commodity swaps are used to obtain or modify exposure to commodities; describe how the construction of commodity indexes affects index returns. | |
7. Commodity Swaps and Indexes explain the notion that to affect market values, economic factors must affect one or more of the following: (1) default-free interest rates across maturities, (2) the timing and/or magnitude of expected cash flows, and (3) risk premiums; explain the role of expectations and changes in expectations in market valuation; |

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