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Basic Question 2 of 2
Under the pathwise valuation approach, the value of the bond is:
B. The geometric average of the values of the bond at each path.
C. The value that occurs most often from all paths (the mode).
A. The arithmetic average of the values of the bond at each path.
B. The geometric average of the values of the bond at each path.
C. The value that occurs most often from all paths (the mode).
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe pathwise valuation in a binomial interest rate framework and calculate the value of a fixed income instrument given its cash flows along each path;
CFA® 2025 Level II Curriculum, Volume 4, Module 27.