Derivatives

[BestEfforts]

Can I expect derivatives to get pretty hairy on the exam? Not a huge fan of deriviatives; although I understand them conceptually, not good at getting down and dirty with formulas. Also found it odd that the Schweser text (SS 15 Reading 28) spends quite a bit of time covering the different option strategies then includes next to nothing for review probs at the EOC.
Level 2 and 3 are both 5-15% Derivatives, and at level II I largely ignored them and took what points I could to focus on really nailing my strength areas (Dr. Holmes strategy). Maybe an L3 taker/passer could shed some light on this for me?

 

[BestEfforts]

For instance, just doing a problem now calculating payoff totals on a Bear Spread strategy.. Can come up with the answer fairly easily by summing all the parts, but will I need to actually give some formulaic answer like:
Vt = Max (0, X2 - St) - max (O, X1-St) etc etc… vs. just writing -.02 + -.15 + .17 = Ans
Fairly straight-forward example, but you get the idea of what I’m asking hopefully..

 

[pokhim]

Dont learn the formulas, learn the shape of the charts and how they show pay-off, profit, loss etc. I dont think you’ll need to show the formula… and I would expect derivs to be in the PM section anyway..

 

[BestEfforts]

Thanks for the input.. Kind of what I was thinking/hoping. Appeared to be much expected for small portion of the exam.