Appendix E: Formulas Used 259
File name: HP 12c Pt Converted_user's guide_English_HDP0F123E02_080207
Page: 257 of 281
Printed Date:
{
2007/8/2Dimension: 14.8 cm x 21 cm
Black-Scholes Formula for Valuing European Options
P
= current asset price.
r%
= risk-free rate (continuous, per time unit).
s%
= volatility (continuous, per time unit).
T
= term of option (same time unit as r% and s%).
X
= exercise price of option.
N(z)
= probability that a unit normal random variable is less than z.
Call Value
=
P × N(d
1
) – Q × N(d
2
)
Put Value
=
Call Value
+ Q – P
where
:
d
1
= LN(P/Q)/v + v/2, d
2
-= d
1
– v
Q
=
Xe
( –
T
×
r
% / 1 0 0 )
, v=s%/100×
T
Depreciation
L
= asset’s useful life expectancy.
SBV
= starting book value.
SAL
= salvage value.
FACT
= declining-balance factor expressed as a percentage.
j
= period number.
DPN
j
= depreciation expense during period
j.
RDV
j
= remaining depreciable value at end of period
j
=
RDV
j–
1
–
DPN
j
where
RDV
0
=
SBV
–
SAL
RBV
j
= remaining book value =
RBV
j–
1
–
DPN
j
where
RBV
0
=
SBV
Y
1
= number of months in partial first year.
Summary of Contents for 12C
Page 1: ...HP 12c Platinum Financial Calculator User s guide H Edition 5 HP part number F2231AA 90001 ...
Page 15: ...Part I Problem Solving ...
Page 48: ...48 Section 3 Basic Financial Functions ...
Page 104: ......
Page 105: ...Part II Programming ...
Page 156: ......
Page 157: ...Part III Solutions ...
Page 230: ......
Page 231: ...Appendices ...
Page 277: ......