Q1: What is the intuitive meaning of N(d2) in the Black-Scholes model?

1. It is the probability of ITM of in the option

2. It is the probability of ITM of at the option

3. It is the probability of ITM of out the option

4. It is the probability of positive time value

Q2: The difference between the conventional volatility and the implied volatility is important. What is wrong?

1. One of common features is that both the conventional and implied volatilities are calculated from the past data.

2. The conventional volatility is backward-looking volatility.

3.The implied volatility is forward-looking volatility.

4. The implied volatility has a strongly negative relation to the market indexes, such as the S&P 500 index.