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Cumulative Distribution One Formula

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Cumulative Distribution 1 here represents the standard normal distribution function of stock price. Check FAQs

D 1 = \frac{\ln (\frac{P c}{K}) + (R f + \frac{{v us}^{2}}{2}) \cdot t s}{v us \cdot \sqrt{t s}}

D₁ - Cumulative Distribution 1?P_c - Current Stock Price?K - Option Strike Price?R_f - Risk Free Rate?v_us - Volatile Underlying Stock?t_s - Time to Expiration of Stock?

Cumulative Distribution One Example

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Here is how the Cumulative Distribution One equation looks like with Values.

Here is how the Cumulative Distribution One equation looks like with Units.

Here is how the Cumulative Distribution One equation looks like.

146.2577 = \frac{\ln (\frac{440}{90}) + (0.3 + \frac{195^{2}}{2}) \cdot 2.25}{195 \cdot \sqrt{2.25}}

146.2577 = \frac{\ln (\frac{440}{90}) + (0.3 + \frac{195^{2}}{2}) \cdot 2.25}{195 \cdot \sqrt{2.25}}

146.2577 = \frac{\ln (\frac{440}{90}) + (0.3 + \frac{195^{2}}{2}) \cdot 2.25}{195 \cdot \sqrt{2.25}}

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Cumulative Distribution One Solution

Follow our step by step solution on how to calculate Cumulative Distribution One?

FIRST Step Consider the formula

D 1 = \frac{\ln (\frac{P c}{K}) + (R f + \frac{{v us}^{2}}{2}) \cdot t s}{v us \cdot \sqrt{t s}}

Next Step Substitute values of Variables

∴

D 1 = \frac{\ln (\frac{440}{90}) + (0.3 + \frac{195^{2}}{2}) \cdot 2.25}{195 \cdot \sqrt{2.25}}

Next Step Prepare to Evaluate

∴

D 1 = \frac{\ln (\frac{440}{90}) + (0.3 + \frac{195^{2}}{2}) \cdot 2.25}{195 \cdot \sqrt{2.25}}

Next Step Evaluate

∴

D 1 = 146.257733213869

LAST Step Rounding Answer

∴

D 1 = 146.2577

Cumulative Distribution One Formula Elements

Variables

Functions

Cumulative Distribution 1

Cumulative Distribution 1 here represents the standard normal distribution function of stock price.

Symbol: D₁

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Cumulative Distribution 1

Current Stock Price

Current Stock Price is the present purchase price of security.

Symbol: P_c

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Current Stock Price

Option Strike Price

Option Strike Price indicates the predetermined price at which an option can be bought or sold when it's exercised.

Symbol: K

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Option Strike Price

Risk Free Rate

The Risk Free Rate is the theoretical rate of return of an investment with zero risks.

Symbol: R_f

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Risk Free Rate

Volatile Underlying Stock

Volatile Underlying Stock is a stock with a price that fluctuates wildly hits new highs and lows or moves erratically.

Symbol: v_us

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Volatile Underlying Stock

Time to Expiration of Stock

Time to Expiration of Stock occurs when the options contract becomes void and no longer carries any value.

Symbol: t_s

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Time to Expiration of Stock

The natural logarithm, also known as the logarithm to the base e, is the inverse function of the natural exponential function.

Syntax: ln(Number)

sqrt

A square root function is a function that takes a non-negative number as an input and returns the square root of the given input number.

Syntax: sqrt(Number)

Other formulas in Forex Management category

Go Cumulative Distribution Two

D 2 = D 1 - v us \cdot \sqrt{t s}

Go Black-Scholes-Merton Option Pricing Model for Call Option

C = P c \cdot P normal \cdot (D 1) - (K \cdot \exp (- R f \cdot t s)) \cdot P normal \cdot (D 2)

Go Black-Scholes-Merton Option Pricing Model for Put Option

P = K \cdot \exp (- R f \cdot t s) \cdot (- D 2) - P c \cdot (- D 1)

Go Interest Rate Parity

k f = Sp \cdot (\frac{1 + I Q}{1 + I B})

How to Evaluate Cumulative Distribution One?

Cumulative Distribution One evaluator uses Cumulative Distribution 1 = (ln(Current Stock Price/Option Strike Price)+(Risk Free Rate+Volatile Underlying Stock^2/2)*Time to Expiration of Stock)/(Volatile Underlying Stock*sqrt(Time to Expiration of Stock)) to evaluate the Cumulative Distribution 1, The Cumulative Distribution one formula is defined as a formula used in various financial models and theories to analyze and evaluate different aspects of financial markets, investments, and corporate finance. Cumulative Distribution 1 is denoted by D₁ symbol.

How to evaluate Cumulative Distribution One using this online evaluator? To use this online evaluator for Cumulative Distribution One, enter Current Stock Price (P_c), Option Strike Price (K), Risk Free Rate (R_f), Volatile Underlying Stock (v_us) & Time to Expiration of Stock (t_s) and hit the calculate button.

FAQs on Cumulative Distribution One

What is the formula to find Cumulative Distribution One?

The formula of Cumulative Distribution One is expressed as Cumulative Distribution 1 = (ln(Current Stock Price/Option Strike Price)+(Risk Free Rate+Volatile Underlying Stock^2/2)*Time to Expiration of Stock)/(Volatile Underlying Stock*sqrt(Time to Expiration of Stock)). Here is an example- 146.2533 = (ln(440/90)+(0.3+195^2/2)*2.25)/(195*sqrt(2.25)).

How to calculate Cumulative Distribution One?

With Current Stock Price (P_c), Option Strike Price (K), Risk Free Rate (R_f), Volatile Underlying Stock (v_us) & Time to Expiration of Stock (t_s) we can find Cumulative Distribution One using the formula - Cumulative Distribution 1 = (ln(Current Stock Price/Option Strike Price)+(Risk Free Rate+Volatile Underlying Stock^2/2)*Time to Expiration of Stock)/(Volatile Underlying Stock*sqrt(Time to Expiration of Stock)). This formula also uses Natural Logarithm (ln), Square Root (sqrt) function(s).

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Cumulative Distribution One Formula

Cumulative Distribution One Example

Cumulative Distribution One Solution

Cumulative Distribution One Formula Elements

Other formulas in Forex Management category

How to Evaluate Cumulative Distribution One?

FAQs on Cumulative Distribution One

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