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10 Ps Ltd

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › 10 Ps Ltd

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.
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  • February 8, 2020 at 8:40 pm #561113
    Elmir
    Participant
    • Topics: 10
    • Replies: 15
    • ☆

    Hello sir. In bpp book there is a calculation of N(d1) for black-scholes model
    d1 = 1.998
    d2= 1.898
    N(d1) = 0.5 +0.4767 + 82 /100 (0.4772 – 0.4767)
    My question is why we add the last part. And what mean 82/100 . Thank you sir

    February 9, 2020 at 10:02 am #561146
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    In the tables you cannot look up 1.998 precisely.

    What the answer has done is looked up for 1.9 and for 2.0 and then apportioned between the two results. There is no need to do this in the exam – simply rounding to the nearest at looking up for 2.0 is sufficient.

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