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Basic Question 0 of 9
According to FAS 123 (R), companies are required to value stock options using an option-pricing model. The preferred model is the:
B. Monte Carlo simulation model.
C. Binomial model.
D. There is no preferred option-pricing model.
A. Black-Scholes-Merton model.
B. Monte Carlo simulation model.
C. Binomial model.
D. There is no preferred option-pricing model.
User Contributed Comments 3
| User | Comment |
|---|---|
| thebkr777 | Contradictory to reading "Fair value was to be estimated using Black-Scholes or binomial option-pricing models." |
| b25331 | Some clarification here, the curriculum states only, that the two models are commonly used, but accounting standards do not prescribe a particular model |
| davidt876 | thanks |
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Craig Baugh
Learning Outcome Statements
compare the risk and return characteristics of different types of equity securities
CFA® 2025 Level I Curriculum, Volume 3, Module 4.