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Basic Question 0 of 8
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 |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for 1) investments in financial assets, 2) investments in associates, 3) joint ventures, 4) business combinations, and 5) special purpose and variable interest entities;
distinguish between IFRS and US GAAP in their classification, measurement, and disclosure of investments in financial assets, investments in associates, joint ventures, business combinations, and special purpose and variable interest entities;
analyze how different methods used to account for intercorporate investments affect financial statements and ratios.
CFA® 2025 Level II Curriculum, Volume 2, Module 10.