‘e’ is a constant (like Pi), and you need a scientific calculator with ‘e’ on it.

It is e^(- 0.03) that is equal to 0.9704. Depending on your calculator is might be easier for you to calculate it as 1 / (e^0.03), which is the same thing.

Hi John, the answer for Example 4b in chapter 13 seems to be missing and I seem to be getting a minus (-321.57 cents). Is that correct or have I done something wrong?

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rmundra says

Which key on the scientific calculator is e ?

John Moffat says

The one with ‘e’ printed on it. All scientific calculators should have an ‘e’ button.

rmundra says

Got it!

thank you so much

ankit9752 says

what is the answer of example 4 b because I am getting the negative put option value i.e

P=4 -150+(180*0.2)

= -110 cent approx…

John Moffat says

The answer is approximately 30 cents.

Using the put call parity formula, p = 4 – 150 + 180 x e^ (- (0.10 x 0.25))

= 4 – 150 + 180 / 1.0253 = 4 – 150 + 176 = 30

lusaibmtr says

How its getting .2828 for 0.40root 0.50

John Moffat says

The suare root of 0.5 is 0.7071. Multiply by 0.4 and you get 0.2828

SHIVAKIRAN says

Hi John,

In 3rd example: How did you arrive at e= 9704. Please help. Thanks!

John Moffat says

e does not equal 9704!

‘e’ is a constant (like Pi), and you need a scientific calculator with ‘e’ on it.

It is e^(- 0.03) that is equal to 0.9704. Depending on your calculator is might be easier for you to calculate it as 1 / (e^0.03), which is the same thing.

danique says

Hi, I’m not getting a negative for example 4 part a

danique says

I don’t know if I’m not calculating something correct but I’m still not getting the answer for example 4 part a

ln (150/180) + (0.1 + 0.5(0.4 squared) *0.25 is the number for?

njmb says

In(150/180) = -0.1823 (this is the negative value you get first)

you then add

[0.1+0.5(0.4squared)] *0.25 {equal 0.045}

Result is -0.1373

Divide by the denominator to get final d1 of -0.6866

Akua says

Hi John, the answer for Example 4b in chapter 13 seems to be missing and I seem to be getting a minus (-321.57 cents). Is that correct or have I done something wrong?

Akua says

Hi John, please ignore i think i have got it now, haha. it is 29.55 cents. Thanks

John Moffat says

No problem 馃檪