John,
Do we need to interpolate (in case of 3 or 4 decimal places) to calculate an exact amount for d1 & d2 in black scholes?
In most of the answers given in approved revision kits, it seems to be a normal practice and seems to be required. I was wondering if i take only 2 decimal places and go with the distribution table i might not score full.
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Interpolation in Black scholes pricing model
10y ago#1The approved revision kits do it because their answers are simply copied from the examiners own answers, and he does it :-)
If you have the time, then do interpolate.
However I myself would not bother in the exam - you will not lose marks (unless maybe you were otherwise getting 100% - then they might subtract a mark :-) )
Thanks for the clarification..
10y ago#3You are welcome (and sorry for the delay in answering).
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