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I got lots of little questions from Hull's and Tuckman's chapters.
1. Do I have to use BSM to calculate call or put on the exam?
2. DO I need to calculate cdi or cdo directly by using N(d1) or N(d2)?
3. Is the volatility means variance or standard deviation?
4. one of the answer sheet said that forward option is paid now. then when is the chooser option paid?
now or choose date?
5. Calculating duration convexity is ambiguous, is there exact formula for that?
6. Q 43.3 said that best reason to employ a non-recombining interest rate tree is that rate cannot be non-zero. I don't know how this is best reason to employ.
7. Q 45-1 from Tuckman's pdf file questions.
2% + 1%*SQRT(1/12) = 2% + 0.289% = 2.29%
Honestly, I don't get this. Can you explain how to get the 2.29%.
Thank you everyone.
1. Do I have to use BSM to calculate call or put on the exam?
2. DO I need to calculate cdi or cdo directly by using N(d1) or N(d2)?
3. Is the volatility means variance or standard deviation?
4. one of the answer sheet said that forward option is paid now. then when is the chooser option paid?
now or choose date?
5. Calculating duration convexity is ambiguous, is there exact formula for that?
6. Q 43.3 said that best reason to employ a non-recombining interest rate tree is that rate cannot be non-zero. I don't know how this is best reason to employ.
7. Q 45-1 from Tuckman's pdf file questions.
2% + 1%*SQRT(1/12) = 2% + 0.289% = 2.29%
Honestly, I don't get this. Can you explain how to get the 2.29%.
Thank you everyone.
