Deep Dive: CFA® Level I Prep 2026

DERIV - Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives

Jul 3, 2025 · 14 min · Season 7 · Episode 4 · 13.9 MB
0:00-14:16

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Link spot and forward prices through no-arbitrage. Build synthetic forwards bycombining cash positions with borrowing/lending, then adjust for dividends,storage, or FX rate differentials in the cost-of-carry. Understand why forwardprices can trade above or below spot—depending on net carry.