CFA Level 2: Alternative Investments
Master the CFA Level II Alternative Investments topic area. This course covers all four official 2026 Learning Modules across four teaching chapters: commodities and commodity derivatives — the sectors and their life cycles, why a commodity cannot be valued the way an equity or a bond is, who is in the futures market and why, the theory of storage and the single variable that flips a curve from contango to backwardation, the competing theories of futures returns, the three components of a fully collateralized futures return computed and decomposed, what the roll costs or pays compounded over a year, how commodity swaps obtain and modify exposure, and how index construction alone moves the reported return by more than three percentage points on identical commodities; private real estate — the features that decide value, the economic drivers, the distinctive characteristics of each commercial property type, the due diligence that must precede any valuation, all four valuation approaches computed on one building and reconciled, and the construction of real estate indexes and the smoothing bias built into the appraisal-based ones; publicly traded real estate — the security types, net asset value per share built line by line from forecast cash net operating income, funds from operations and adjusted funds from operations and the gap between them, a REIT valued four independent ways against its market price, and what the public-versus-private gap actually tells an analyst; and hedge fund strategies — how strategies are classified, the investment characteristics, implementation, and portfolio role of the equity, event-driven, relative value, opportunistic, specialist, and multi-manager families, factor models used to expose the risk a strategy label conceals, and a full evaluation of what a hedge fund allocation does to a traditional portfolio once its reported statistics are corrected. Every worked problem is stated exam-style and solved by hand first — with BA II Plus keystrokes where the calculator is the exam-day tool — then validated in runnable Python, and assessed in the exam's own vignette format: item sets with data exhibits, three-option questions, and distractors built from real candidate errors. The course closes with a full timed item-set exam. Aligned to the 5-10% CFA Level II exam weight.
- Level: intermediate
- Duration: 3 weeks
- 6 sections
- Price: $20
Topics: commodities, commodity derivatives, commodity sectors, theory of storage, convenience yield, contango, backwardation, roll return, collateral return, price return, fully collateralized futures, insurance theory, hedging pressure hypothesis, commodity swaps, excess return swap, total return swap, commodity index construction, diversification return, real estate valuation, net operating income, capitalization rate, direct capitalization, gross income multiplier, terminal capitalization rate, cost approach, sales comparison approach, due diligence, commercial property types, appraisal-based index, transaction-based index, smoothing bias, REIT, REOC, net asset value per share, NAVPS, funds from operations, FFO, adjusted funds from operations, AFFO, price to FFO, public versus private real estate, hedge fund strategies, equity market neutral, long/short equity, merger arbitrage, distressed securities, convertible arbitrage, fixed-income arbitrage, volatility trading, managed futures, global macro, fund of funds, multi-strategy, factor models, portfolio impact, stale pricing, CFA Level II, alternative investments, item sets, vignettes
What's inside
- Alternative Investments (CFA Level II)
- Chapter 1: Introduction to Commodities and Commodity Derivatives
- Chapter 2: Overview of Types of Real Estate Investment
- Chapter 3: Investments in Real Estate through Publicly Traded Securities
- Chapter 4: Hedge Fund Strategies
- Chapter 5: Alternative Investments Item-Set Exam