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- March 4, 2021 at 6:29 am #613205
Please explain me the following issue:

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 -0.235when 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) 0.6402Similarly -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.March 4, 2021 at 8:44 am #613248To things:

Firstly, looking up 0.359 does not give a value of 0.1517. (0.1517 is what you get if you look up for 0.39!!)

Secondly, given that the tables only go to 2 decimal places, the examiners answer apportions between that value for 0.35 and 0.36. However there is no real need to do this in the exam and it is fine if. you just round to two places and so use the result for 0.36.

The same applies to 0.235. You have looked up for 0,25 for some reason and that is wrong!!

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