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Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › Nente Co June 12 Adapted Part c Black schole option pricing model
I calculated d1 and d2 value and its understood
but we know if d1 and d2 are +ve then we add 0.5 to standard normal distribution table values and if D1 & d2 turns out to be -ve then we subtract 0.5 from their respective values.
As per answers
D1 was 0.359
D2 was -0.235
when I look up for values d1 0.359 in normal distribution table it gives value of 0.1517 and after adding 0.5 in this value we get 0.6517 N(d1)
but in the kit answer it shows N(d1) 0.6402
Similarly -0.235 should give us value of 0.0987 and as it is d2 was -ve we subtract 0.5 form its respective figure and arrive at N(d2) of 0.4013 and again when I compare it with answer in the kit there is a different value i-e 0.4071
the difference is not huge but due to the difference my answer does not matches.
I would really appreciate if any one can explain this.
I think values are rounded to .36 and .24.