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Basic Question 1 of 14
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 |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe foreign currency transaction exposure, including accounting for and disclosures about foreign currency transaction gains and losses;
analyze how changes in exchange rates affect the translated sales of the subsidiary and parent company;
CFA® 2026 Level II Curriculum, Volume 2, Module 11.