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Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › Black-Scholes
Hi, how exactly do you compute In(Pa/Pe).. for example what would be the result in In(2.9/2.6)
I just use calculator and round up the result at two decimal
the result will be 0.1092.
firstly you divide 2.9 by 2.6 and press log in your scientific calculator.
Make sure your d1 and d2 should be round up to 2 decimal place and use normal distribution to find N(d1) and N(d2) and round these figures to 4 decimal place.
hope it helps.
Thanks alot Ray and the other person. Lemmie try it out. Please attempt P4 open tuition Chapter 13 example 3 then send me your answers.
My answer for call option is 52.8 cent as well as put option is 15.3 cent.
2.9/2.6= 1.1153846
logn 1.1153846= 0.04742
how are you getting 0.1092 ?
Exactly which buttons are you pressing ?
When you say ” firstly you divide 2.9 by 2.6 and press log ” I assumed you mean we find the log of 1.1154
when you get 1.1153846, press ln and you will get 0.1092
remember BSOP model for d1 is ln(Pa/Pe …….
@brainstorm22 said:
Thanks alot Ray and accaforall. Lemmie try it out. Please attempt P4 open tuition Chapter 13 example 3 then send me your answers.
