The cumulative normal distribution can be approximated (to within about six decimal places) by the modified polynomial

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The cumulative normal distribution can be approximated (to within about six decimal places) by the modified polynomial relation

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where

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Use this formula to find the value of a call option with parameters \(T=.5, \sigma=.25, r=.08\), \(K=35\), and \(S_{0}=\$ 34\).

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Investment Science

ISBN: 9780199740086

2nd Edition

Authors: David G. Luenberger

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