Black Sholes

Hi, Does anyone know if we are expected to memorize the Black Sholes equations? Thx.

Schweser says No!

That would be fun, working through combinations by hand in a 3 hour exam?!

Ugh, I remember I had to remember Black Scholes for my options class. Luckily, the CFAI won’t inflict the same punishment on its candidates.

I don’t know if that is a guarantee. There is one example in the book that asks for it, but I will just guess the answer if it does come up in the exam.

d31dy Wrote: ------------------------------------------------------- > I don’t know if that is a guarantee. There is one > example in the book that asks for it, but I will > just guess the answer if it does come up in the > exam. Try to remember main relationships. Implied vol goes up -> price of both call and put goes up, underlying goes up -> call goes up, put goes down (assuming implied vol doesn’t change), etc …

No. I didn’t bother in 2008 and I passed. It will be foolish to try to remember something like that on the exam. There are other areas where trying to do everything is simply not worth the time and effort. I skipped half of Port Management becuase it was way too complicated and an average charterholder would not be able to do those questions.

Thanks for the replies. I think I agree with you on that. Initially I was a little worried because many people were saying that there are many questions in the exam that are the “trivial pursuits”. But I think those should not account for more than 10% of the exam. So, as long as we fully understand the core concepts, we should be fine.