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Basic Question 9 of 12

Continue with the previous question. Show that the payoff is equivalent to that of a call option on a bond with an exercise price of $1 (the par value of the bond).

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

describe how the Black model is used to value European options on futures;

describe how the Black model is used to value European interest rate options and European swaptions;

CFA® 2025 Level II Curriculum, Volume 5, Module 32.