- CFA Exams
- CFA Level I Exam
- Study Session 14. Derivatives
- Reading 38. Valuation of Contingent Claims
- Subject 4. Black-Scholes-Merton Option Valuation Model

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**CFA Practice Question**

In the BSM model, if d is greater than zero, we can conclude that N(d) is greater than ______.

A. 0

B. 0.5

C. 1

**Explanation:**N(x) is simply the standard normal cumulative distribution function. The standard normal distribution has a mean of 0. Half of the distribution is to the right side of the y-axis.

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