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# Thread: Black Scholes and the Cumulative Dist Fn.

1. ## Black Scholes and the Cumulative Dist Fn.

I'm just starting section 8 of the ASM Manual (Black Scholes).

The equation for Black Scholes requires you to find N(d1), and the author explains N(x) is the cumulative distribution function. So, for example, in Example 8A, where they calculate N(-.05)=.4801, is this something they are going to give us a table for on the exam or something that is expected to be figured with a calculator?

2. N(x)=1-N(-x) where N(x) is the value to the left of value x on the normal distribution graph i.e. from negative infinity to x.

For example N(0.05)=0.5199 so N(-0.05)=1-N(0.05)=1-0.5199=0.4801

The table given on the exam is easy to use since any value we obtain of d1 or d2 is just plugged into the chart.

3. Hello? Is that a sufficient answer?

4. Yes, thanks very much!

5. You're welcome, I just wanted to make sure it helped/I was right.

Thanks.

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