Discounting [25]

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Bullet points include: IAA (2013) seems to think that option pricing methods may offer a powerful alternative in situations where: Risk-free rates cannot be directly observed or there is considerable uncertainty A reliable option pricing model exists that is historically validated One of its inputs is the risk-free interest rate Other inputs can either be estimated or observed Kemp (2009) indicates that normally process is the opposite of this Other less easily observable inputs (e.g. market implied volatility) are derived based on option prices and more easily observable inputs including interest rates

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