This preview shows page 1. Sign up to view the full content.
Unformatted text preview: distribution. Thus, N(d 1 ) and N(d 2 ) represent areas under a standard normal distribution function. X = strike price of the option. e 2.7183. r RF = risk-free interest rate. t = time until the option expires (the option period). ln(P/X) = natural logarithm of P/X. 2 = variance of the rate of return on the stock....
View Full Document
- Spring '08