Schweser notes that memorizing the bsm model formula is no longer required for the exam, yet cfai sent out email yesterday claiming this section in derivatives was marked as “optional reading” by mistake. Which is it? Should you be able to derive this formula on the exam?
There is no LOS that says that you will have to compute an option value using BSM. You do have to know the assumptions that underlie BSM and the sensitivities of BSM to its five inputs.