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
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6y ago#1In 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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