This topic contains 3 replies, has 2 voices, and was last updated by John Moffat 3 years ago.
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Home › Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA P4 Exams › Normal distribution tables – Black Scholes Model
This topic contains 3 replies, has 2 voices, and was last updated by John Moffat 3 years ago.
What happens when the values calculated for d1 and d2 are not exactly those shown in the normal distribution tables, as is often the case ?
For example if I calculate d1 as 0.9286 do I simply add 0.3212 + 0.3238 = 0.645 and divide by 2 to get 0.3225. Add 0.5 to the latter to get d1= 0.8225. This is the method I’ve been using but I doubt it is the accurate one.
Please help
Massif
You are not expected to get an exact figure for N(d)
What you are doing is fine, but in fact for the exam you only need to take the nearest figure (i.e. for N(d1) if d1 is 0.9286, just round to two places and look up 0.93 in the tables.
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