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BSOPS- Marengo Co Dec 2010

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › BSOPS- Marengo Co Dec 2010

  • This topic has 5 replies, 2 voices, and was last updated 10 years ago by AvatarJohn Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • November 22, 2015 at 9:06 am #284457
    AvatarJyoti
    Member
    • Topics: 3
    • Replies: 2
    • ☆

    The d1 calculated was a negative figure i.e. d1= -0.0552, the answer then changes it to -d1=0.0552. Why was that done? Does it have a different meaning?

    November 22, 2015 at 9:39 am #284475
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    It is because we are dealing with put options, and the question tells you (the note at the end of requirement (a)) that the delta is N(-d1).

    d1 = -0.0552, so -d1 = – – 0.0552 = + 0.0522 (two minus’s because a plus)

    November 22, 2015 at 9:50 am #284483
    AvatarJyoti
    Member
    • Topics: 3
    • Replies: 2
    • ☆

    Thank you.

    so if the note was not given we would take it as a negative?

    November 22, 2015 at 10:08 am #284486
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    That is correct 🙂

    November 22, 2015 at 10:10 am #284488
    AvatarJyoti
    Member
    • Topics: 3
    • Replies: 2
    • ☆

    Thank you very much!!

    November 22, 2015 at 10:14 am #284490
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    You are welcome 🙂

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