Surely you jest.
S2000magician:My mistake: you may have to calculate an option price from a 1-period or 2-period binomial model, but not from BSM. I was thinking only about BSM.
Sorry.
How did you reach that conclusion?
LOS 50b : Calculate and interpret prices of interest rate options and options on assets using one- and two-period binomial models.
CFA Institute says that you need to know how to calculate the price of options using binomial trees.
LOS 50c : Explain and evaluate the assumptions underlying the Black-Scholes-Merton model.
LOS 50d : Explain how an option price, as represented by the Black-Scholes-Merton model, is affected by a change in value of each of the inputs.
CFA Institute does not say that you need to know how to calculate the price of options using BSM.