Black-Scholes-Merton (BSM) Model | Transition from Binomial to BSM | CFA Level 2 Derivatives

Welcome to the CFA Level 2 Derivatives Revision Series by CA Nikhil Jobanputra. This session is specially designed to build a strong conceptual foundation for Options Valuation through Black-Scholes-Merton (BSM) Model — one of the most important and interesting topics in CFA Level 2 Derivatives. Master the foundation of option pricing with one of the most important CFA Level 2 Derivatives topics — Valuation of Contingent Claims. In this lecture, we solve a complete Single-Period Binomial Model question and then build the bridge towards the Black-Scholes-Merton (BSM) Model. Instead of memorising formulas, understand why they work. Topics Covered ✔ Single Period Binomial Model ✔ Risk-Neutral Probability ✔ Call Option Valuation ✔ Put Option Valuation ✔ Hedge Ratio (Delta) ✔ Replicating Portfolio ✔ Risk-Free Hedging ✔ Transition from Binomial Model to Black-Scholes-Merton Model ✔ Intuition behind N(d₁) and N(d₂) ✔ Conceptual understanding for CFA Level II If you found this lecture helpful, 👍 Like the video 💬 Share your doubts in the comments 🔔 Subscribe for complete CFA Level 2 Derivatives lectures. CA Nikhil Jobanputra Founder – SFM Guru Simplifying Finance. Joyful Learning. We simplify your financial learnings. ►►CFA Level 1: ►►CA Final AFM Courses: ►►CMA Final SFM Courses: ►►Subscribe here to learn more of Strategic Financial Management: ►►Read more on our website: ►►About CA Nikhil Jobanputra: CA NIKHIL JOBANPUTRA is a highly respected & accomplished professional educator with a demonstrated trajectory in the field of training CA, CFA and CMA students, known for his proficiency, dedication, and commitment in delivering top quality professional training and proven results. With over 23 years of experience, he has coached over 50,000 students across India. His expertise lies in teaching CA, CFA and CMA students, notably in Strategic Financial Management, Financial Reporting, IFRS & Ind AS. He realized his penchant for teaching in 1997, when he started his Institute, post that there was no stopping him and the journey still continues as a Founder Faculty of Incito Academy. He is the founder and core faculty of SFM Guru, an institution that is known for making the learning experience interesting and engaging. #cfa #cfalevel1 #cfalevel2 #cafinalsfm #sfm #cmafinalclasses #optionstrading #options #cafinalafm #OptionsValuation #Valuationofoptions #Valuation #Derivatives #cfaindia #CFAPrep #cfapreparation #cfa2026 #BinomialModel #BlackScholes #BSM #OptionPricing #ContingentClaims