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d1=[log(S/E)+(r+(sigma)2(T-t)]/sigma*Sq(T-t)
d2=[log(S/E)+(r-(sigma)2(T-t)]/sigma*Sq(T-t)
Sq means square root.
S is price of asset
E is the Excercise price
r is interest rate
sigma is the volatility
T-t is time to maturity
d2 is very similar to d1 but notice the minus sign.
Another useful property is d2=d1-Sq(T-t)
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What are D1 and D2 in Black-Schole model?
d1 is ln(SpotPrice/StrikePrice)+((RiskFreeRate + (0.5*(sigma^2)))*TimeToMaturity) d2 is SpotPrice-sigma*TimeToMaturity^0.5 These equations are taken from the spreadsheet found in the related link
Describe how multiplication and division of rational expressions can be done?
Suppose X1 = N1/D1 and X2 = N2/D2 are two rational expressions, where the numerators N1 and N2 and denominators D1 and D2 are simpler expressions. Then X1 * X2 = (N1*N2)/(D1*D2) and X1 / X2 = (N1*D2)/(D1*N2).
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1/2 d1 d2
When you multiply fractions by fractions what do you do to the numerators?
they are also multiplied. When multiplying fractions: (N1/D1) x (N2/D2). The new product is (N1 x N2) / (D1 x D2).
Formula of area of a kite?
The answer is half the product of the length of its diagonals... 1/2(d1*d2) it can also be 1/2 times x times y
