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

Question

Quizplus · Accepted Answer

N(d) represents the cumulative distribution function (CDF) of a standard normal distribution. The value of N(d) gives the probability that a standardized normally distributed random variable is less than or equal to d. Therefore, the correct answer is E as it states "less than or equal to d".

In the Black-Scholes Option Pricing Formula,N(d)is the Probability That a Standardized,normally