In the Black-Scholes Option Pricing Formula, N(d1) Is the Probability

question 42

Multiple Choice

In the Black-Scholes option pricing formula, N(d1) is the probability that a standardized, normally distributed random variable is:

• A)less than or equal to N(d2).
• B)less than one.
• C)equal to one.
• D)equal to d1.
• E)less than or equal to d1.

---

Definitions:

Camera Eye

A type of eye found in vertebrates and some mollusks that is characterized by a spherical lens that focuses light on the retina, producing a detailed image.

Ocelli Eye

Simple eyes, or ocelli, are found in some invertebrates, consisting of photoreceptor cells to detect light intensity and direction, but not form detailed images.

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time.

Smells

The perceptions or sensations caused by the olfactory detection of airborne molecules or particles.