This paper evaluates the economic significance of the implied deterministic volatility function (DVF) by examining its predictive and hedging performance using S&P 500 index options from June 1988 to December 1993. The DVF option valuation model, which posits that the volatility of the underlying asset's return is a deterministic function of asset price and time, is compared to an ad hoc Black-Scholes model with variable implied volatilities. The results show that the DVF model's performance is worse than that of the ad hoc Black-Scholes model, indicating that the DVF approach does not provide a significant improvement in valuation or risk management. The paper concludes that the DVF model, despite its theoretical appeal, does not offer practical advantages over simpler models in this context.This paper evaluates the economic significance of the implied deterministic volatility function (DVF) by examining its predictive and hedging performance using S&P 500 index options from June 1988 to December 1993. The DVF option valuation model, which posits that the volatility of the underlying asset's return is a deterministic function of asset price and time, is compared to an ad hoc Black-Scholes model with variable implied volatilities. The results show that the DVF model's performance is worse than that of the ad hoc Black-Scholes model, indicating that the DVF approach does not provide a significant improvement in valuation or risk management. The paper concludes that the DVF model, despite its theoretical appeal, does not offer practical advantages over simpler models in this context.