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Old 02-28-2018, 03:26 PM
ann79922 ann79922 is offline
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Default Will multinomial trees be tested?

I have the 10th edition ASM manual, and there's a section on multinomial trees (in the binomial trees chapter) on p.118-119. However, the manual states that multinomial trees may no longer be on the exam as of July 2017. Furthermore, I don't see multinomial trees on the March 2018 exam syllabus. I'll skip this section if it won't be tested on, but I want to verify whether or not that's the case. Does anyone know? Thanks.
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Old 02-28-2018, 04:21 PM
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Quote:
Originally Posted by ann79922 View Post
I have the 10th edition ASM manual, and there's a section on multinomial trees (in the binomial trees chapter) on p.118-119. However, the manual states that multinomial trees may no longer be on the exam as of July 2017. Furthermore, I don't see multinomial trees on the March 2018 exam syllabus. I'll skip this section if it won't be tested on, but I want to verify whether or not that's the case. Does anyone know? Thanks.
There used to be an SOA sample question on multinomial tree prior to July 2017 (i.e., the old MFE syllabus). When we switched to the current syllabus (starting July 2017), the SOA removed that particular sample question. I guess it's safe to assume that such question is no longer applicable to the current syllabus. Solving a problem involving multinomial tree using risk-neutral probabilities is really not hard, though.
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Old 03-02-2018, 09:04 AM
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Multinomial trees is not on the IFM syllabus. Multi-period binomial trees is. Also, distinguish between recombining and non-recombining multi-period binomial trees.
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