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I’ve calculated d1 & d2.
However, what is happening with regards to Nd1 & Nd2.
In the answers it says:
N(d1) = 0.5 — 0.0636 = 0.4364
N(d2) = 0.5 — 0.2517= 0.24830.5 & 0.0636? Where are these numbers coming from?
d1 = -0.16
N(d1) is found by looking up 0.16 in the normal distribution tables that are provided in the exam.
Because d1 is negative the figure from the tables is subtracted from 0.5 as is stated at the bottom of the tables.
This is all explained in my free lectures on options.
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