Hi admin, I would want to clarify if the state price deflator approach will no longer be tested although it still appears in the CMP.
Hi Jeremy Although state price deflators haven't been examined for a while, they are still very much on the syllabus and in the Core Reading. They are most likely to come up in the context of the binomial model and that's where you should concentrate your efforts for deflators. They may also appear in a question on risk-neutral pricing so I would learn what's on the Summary Page (Page 31) of Chapter 17. Useful past exam questions on state price deflators to look at are: CT8 April 2005 Q10 CT8 April 2007 Q3 CT8 Sep 2011 Q7 CT8 Sep 2013 Q6 CT8 April 2005 Q8 CT8 Sep 2009 Q5 Hope this helps Anna
