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Lippie Essay Preview: Lippie Report this essay Assignment 5: SBC – Option-Pricing Models and Volatility A. Option Pricing Models and Volatility Model “Valuation techniques meeting SFAS 123(R)s criteria are closed-form models, such as the Black-Scholes-Merton formula, and binomial models, such as the lattice model. The Black-Scholes-Merton formula is generally applied the same way to awards.