Sir, in BPP kit question 18 Marengo, qn (a), the following has been done in the answer,
d1= -0.06 -d1= 0.06 N(-d1)= 0.5+0.0239=0.5239
I don’t understand how and why did they reverse the value of d1 and made it a positive value and added 0.5 with the cumulative value. According to me, it should have been like this d1= -0.06 N(d1)= 0.5-0.0239=0.4761.
Had you been required to use call options then you would have been correct.
However the question specifically says to use put options and says that the delta of a put option is equivalent to N(-d1). (Exam questions will always say this if you are required to use put options).
Given that d1 = – 0.06, then -d1 = + 0.06 and so the printed answer is correct.