CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

According to FAS 123 (R), companies are required to value stock options using an option-pricing model. The preferred model is the:

A. Black-Scholes-Merton model.
B. Monte Carlo simulation model.
C. Binomial model.
D. There is no preferred option-pricing model.
Correct Answer: D

No particular technique is required or preferred.

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 need to log in first to add your comment.