option value

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June 22, 2018 at 5:01 pm #459730
foeldh123
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1. for N(d1) and N(d2), why do we add 0.5 ??? the textbook asks us to add 0.5 but I’m not sure what is the logic behind this…
June 23, 2018 at 9:30 am #459778
John Moffat
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I expelling this in my lectures (although the logic is not relevant for the exam).

Also, you only add 0.5 is d is positive, if it is negative then you subtract from 0.5
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