![]() ![]() It is the probability that a random draw from. N (d1) and N (d2) denotes the standard cumulative normal probability for the values of d1 and d2. e 2.71828 is the base of the natural log. It does not let us leave a worksheet that is well documented and that can be easily modified by someone else asking similar questions. or exp(rt), is the natural exponent of the value of (in common terms, it is a discount factor) ln(S/K) is the natural log of the moneyness term,S/K. The CAS method does not require special commands, but it takes us out of our Excel environment. It should be noted that Excel has corresponding commands for the other standard probability distributions. It would probably be the favored method if we were doing a lot of these computations. The Excel with statistics command approach requires us to learn special commands. It also shows intermediate values if we have a less sharp question and are trying to see what is going on and are still deciding on the business question we want to ask. ![]() It is the easiest to adapt if we are doing some nonstandard distribution of a population. It is also conceptually the most straightforward and the most flexible. The Riemann sums method takes the most work to set up. The parameters of the normal are the mean (mu) and the standard deviation. Since it is a continuous distribution, the total area under the curve is one. It is worthwhile to consider the advantages and disadvantages of the methods. This bell-shaped curve is used in almost all disciplines. We have looked at three methods for finding a portion of a normally distributed population, which we describe as Excel with Riemann sums, Excel with statistics commands, and CAS. Of the 1000 pairs of shoes, 211 should be size 7. \) I am ready to set up a Riemann sum worksheet as we did in section \(7.1\) ![]()
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