luda002

Is the CFAI automatically giving you the risk neutral probabilities? I didn't use the CFAI text to learn this material.



Edited 1 time(s). Last edit at Wednesday, May 18, 2011 at 02:19PM by KSTHANE.

busterbluth

Value. for example Schweser in their book will give you the value of up at 1.33 they then say you calculate the value of down as 1/1.33.

In CFAI they give you value of up and value of down in terms of percent.

I can solve the CFAI fine but what has me confused is why Schweser does it this way and which should we expect on the exam

SFoyil

I'm not sure if you are talking about the value of the move or the probability of it. But they would both have to be calculated.