Stock Options

Stage 6 (2021) “Stock Options”

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The objective of this case is to value stock options using the binomial tree valuation model. The case consists of five parts that gradually become more complex, starting with basic probabilities and continuous discounting and moving to valuing options using a three-year, quarterly binomial tree model.

This is an actual case from the Financial Modeling World Cup 2021, Stage 6 (June 25-28) competition. This case deals with option pricing and could be quite a challenge if you haven’t refreshed your knowledge on option pricing after graduation from the university.

The downloadable file consists of the following:
Task: PDF file with Case Materials; PDF file with Questions
Solution: Excel file with full Solution Model; PDF file with correct Answers in Bold

This model awarded 350 regular points + 50 Extra Points for a bonus question, while the whole 2h Stage allowed to earn 1,150 points in total.

For your questions/suggestions/consideration please reach out to the Organizing Committee of the Financial Modeling World Cup at info@fmworldcup.com