Archive for June, 2009
K Finance Options
June 30th, 2009
Question: Please explain in detail exactly how the Black-Scholes-Merton formula works with pricing of a option?
I am a finance major with a test on it. I have to use this formula that says
P = Ke^rt N(-d2) - Se ^yT N(-d1)
What is this?
S= Stock price
y= stock dividend yield
k= strike price
r= risk free rate
T= time remaining until expiration
Anyone that can explain this to me, i wuold be so gratefull
Answer: This is the Black-Scholes option pricing formula that is used to price European-style options.
N(d2) and N(d1) are taken from the normal probability distribution tables. You are missing two more formulas there. That is, there's a separate formula for d1 and d2. See here for them:http://en.wikipedia.org/wiki/Black-Scholes
Once you have all the variables, just plug them in and get your option price.
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Investment Broker Finance
June 29th, 2009
Question: 16 year old looking for a career in business/finance need advice?
I really want to get a job as a loan officer once I graduate from High School. What are some other career choices that would go great for me since I like dealing with money, business, sales, commisions?
So far I have looked into stock broker, real estate agent, loan officer, investment officer. They all provide the potiental for 5 figures to 7 figures income.
what are some other choices that will go good for me?
Answer: Go to college, you wont be making anything over $30k if you dont get your butt in school with at least a bachelors in business, more than likely you will need a masters in business administration, accounting or finance.
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