What Does N(d?) Represent in the Black-Scholes Model

question 121

Multiple Choice

What does N(d?) represent in the Black-Scholes model?

• A) Hedge ratio.
• B) Partial derivative of the call's value with respect to the stock price.
• C) Change in the option's value given a one dollar change in the underlying security's price.
• D) Option's delta.
• E) All of the above.

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Definitions:

Inventory Item

Goods or materials that a business holds for the ultimate purpose of resale or use in production.

Inventory Value

The total cost or market value of all the goods held by a company intended for sale or for use in producing goods for sale.

Cost Or Market

An accounting method for inventory valuation, valuing inventory at the lower of its historical cost or market value.

Weighted Average Cost

A method of inventory costing that assigns a weighted average cost to each unit of inventory on hand, based on the cost of goods available for sale and the number of units available.