Where do you get the value for "N" without using Excel and what does it mean? Is there some sort of chart or something Explain.

 

Transcribed Image Text:

What is the price of a European call option on a non-dividend-paying stock when the stock price is $52, the strike price is $50, the risk-free interest rate is 12% per annum, the volatility is 30% per annum, and the time to maturity is three months? In this case, S = 52, K = 50, r=0.12, o=0.30, and T = 0.25. In(52/50)+(0.12+0.3²/2)0.25 0.30-√0.25 d₁= or $5.06. = d₂=d, -0.30-√0.25 = 0.3865 The price of the European call is = 0.5365 52N (0.5365)-50e-0.12x0.25 N(0.3865) = 52×0.7042-50e 0.03 x0.6504 = 5.06 What is the price of a European call option on a non-dividend-paying stock when the stock price is $52, the strike price is $50, the risk-free interest rate is 12% per annum, the volatility is 30% per annum, and the time to maturity is three months? In this case, S = 52, K = 50, r=0.12, o=0.30, and T = 0.25. In(52/50)+(0.12+0.3²/2)0.25 0.30-√0.25 d₁= or $5.06. = d₂=d, -0.30-√0.25 = 0.3865 The price of the European call is = 0.5365 52N (0.5365)-50e-0.12x0.25 N(0.3865) = 52×0.7042-50e 0.03 x0.6504 = 5.06

Answer rating: 100% (QA)

The value N that youre asking about refers to the cumulative distribution function CDF for a standar... View the full answer