Answer:
A D F E
Step-by-step explanation:
Answer:8
Step-by-step explanation: Since the opposing way of solving is division, you divide 72 into 9 and you get 8.
Answer:
Brownian Motion- The usual model for the time-evolution of an asset price S(t) is given by the geometric Brownian motion.
Now the geometric Brownian motion is represented by the following stochastic differential equation:
- Note- <em>coefficients μ representing the drift and σ,volatility of the asset, respectively, are both constant in this model.</em>
To solve the problem now we have the been Data provided:
μ= 0.12,
σ=0.24,
Step-by-step explanation:
<u>Step A:</u>
we have, the variables of Black Scholes Model, by putting the values of variables available, we get:
- S = Current stock price = 40
,
Next is, "r" the risk free rate,
- risk free rate, r = mu = 0.12
,
- time to maturity, T, as we have;
- T= 4 months = 4/12.
- T = 1/3 year(360 days)
<u>Step B:</u>
We now need to calculate the parameter d₂ of the Black Scholes Model. .
- The probability which we want is 1 - N(-d₂),
<u>Step C:</u>
As step C is done on excel for further calculations so, do use it if you are solving it on computer.
Well from positive y axis Q is situated at 6 units while P is situated at 3 units.
So length of PQ - 6+3 = 9 units.
Rounding up your answer is 10 units