CCM Derivatives study plan
CCM Derivatives · Give each week a clear focus.
8 weeks · About 7 hours per week
Derivatives Fundamentals and Market Structure & Interest Rate Risk and Hedging Instruments
Define and distinguish forward, futures, option, and swap payoffs with worked numeric examples
Map the lifecycle of an exchange-traded vs. cleared OTC trade, naming each intermediary role
Compute and interpret duration, modified duration, DV01, and convexity for a sample bond portfolio
Explain how a plain-vanilla interest rate swap converts fixed to floating exposure and calculate its net cash flows
Your checkpoint
One-page payoff/role reference sheet plus 10 solved duration and DV01 problems with answers checked
Interest Rate Risk and Hedging Instruments
Build a hedge using interest rate futures and calculate the optimal hedge ratio given a target DV01
Design a swap-based hedge for a floating-rate liability and quantify residual basis risk
Compare caps, floors, and collars on cost and payoff profile for a borrower hedging rising rates
Identify the valuation inputs that move swap mark-to-market most and rank them by sensitivity
Your checkpoint
A written hedge recommendation memo for a hypothetical floating-rate borrower with DV01 math shown
Interest Rate Risk and Hedging Instruments & Foreign Exchange Risk Management
Compute forward FX rates from spot and interest rate differentials using covered interest parity
Distinguish transaction, translation, and economic FX exposure and match each to an instrument
Size a forward hedge for a known foreign-currency receivable and reconcile to a money-market hedge
Explain how FX options and participating forwards differ in cost and payoff for a hedger
Your checkpoint
FX exposure register for a sample multinational with a matched hedge instrument and size for each exposure
Foreign Exchange Risk Management
Evaluate a cross-currency swap as a hedge for foreign-currency debt and trace principal and coupon flows
Quantify hedge effectiveness for an FX hedge using a dollar-offset comparison
Diagnose common FX hedge failures such as timing mismatch, notional mismatch, and rolled forwards
Your checkpoint
Midpoint self-test of 25 mixed Domain 1-3 questions scored against a 75% pass threshold
Commodity and Other Price Risk Exposures & Counterparty and Credit Risk Management
Explain how commodity forwards, futures, and options differ in margin, basis, and delivery obligations
Compute basis risk for a hedger whose exposure differs from the futures contract underlying
Define current exposure, potential future exposure, and expected exposure and rank counterparties by them
Apply netting, collateral, and thresholds to calculate a counterparty's effective credit exposure
Your checkpoint
Counterparty exposure worksheet computing net exposure across three counterparties with and without a CSA
Counterparty and Credit Risk Management & Accounting, Valuation and Disclosure for Derivatives
Distinguish bilateral clearing from central clearing and name the credit mitigants each provides
Classify a hedge as a fair value hedge vs. a cash flow hedge and state the P&L and OCI treatment
Perform a hypothetical derivative test and document the ineffectiveness amount
List required derivative disclosures for fair value hierarchy, notional amounts, and credit risk
Your checkpoint
Two-page accounting memo classifying three sample hedges with journal-entry logic and disclosure checklist
Derivatives Policy, Controls and Compliance & Accounting, Valuation and Disclosure for Derivatives
Draft the core elements of a derivatives policy: permitted instruments, limits, authority, and valuation sources
Design a control set covering trade capture, confirmation, valuation, and limit monitoring
Identify compliance obligations tied to documentation, counterparty onboarding, and recordkeeping
Explain mark-to-model governance and independent price verification requirements
Your checkpoint
A one-page derivatives policy outline with a control matrix mapping each control to its risk
Derivatives Fundamentals and Market Structure & Interest Rate Risk and Hedging Instruments & Foreign Exchange Risk Management & Commodity and Other Price Risk Exposures & Counterparty and Credit Risk Management & Accounting, Valuation and Disclosure for Derivatives & Derivatives Policy, Controls and Compliance
Synthesize all seven domains into a weighted practice exam and score each domain separately
Re-drill the two lowest-scoring domains until each clears 80%
Recite key formulas (DV01, hedge ratio, covered interest parity, exposure netting) from memory
Build a personal error log of missed concepts with the corrected reasoning for each
Your checkpoint
Full 60-question timed practice exam with a domain-by-domain scorecard and remediation log
Milestones
Week 2: Can independently compute DV01 and a futures hedge ratio without notes and explain the residual risk
Week 4: Scores at least 75% on the 25-question mixed Domain 1-3 self-test
Week 6: Correctly classifies all three sample hedges and states the accounting treatment for each
Week 8: Scores at least 80% overall on the full practice exam with no single domain below 70%