Cumulative Distribution Two Calculator

✖Cumulative Distribution 1 here represents the standard normal distribution function of stock price.ⓘ Cumulative Distribution 1 [D₁]			+10% -10%
✖Volatile Underlying Stock is a stock with a price that fluctuates wildly hits new highs and lows or moves erratically.ⓘ Volatile Underlying Stock [v_us]			+10% -10%
✖Time to Expiration of Stock occurs when the options contract becomes void and no longer carries any value.ⓘ Time to Expiration of Stock [t_s]			+10% -10%

✖Cumulative Distribution 2 refers to the standard normal distribution function of a stock price.ⓘ Cumulative Distribution Two [D₂]

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Cumulative Distribution Two

Formula

`"D"_{"2"} = "D"_{"1"}-"v"_{"us"}*sqrt("t"_{"s"})`

Example

`"57.5"="350"-"195"*sqrt("2.25")`

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Cumulative Distribution Two Solution

STEP 0: Pre-Calculation Summary

Formula Used

Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock)
D₂ = D₁-v_us*sqrt(t_s)
This formula uses 1 Functions, 4 Variables

Functions Used

sqrt - A square root function is a function that takes a non-negative number as an input and returns the square root of the given input number., sqrt(Number)

Variables Used

Cumulative Distribution 2 - Cumulative Distribution 2 refers to the standard normal distribution function of a stock price.
Cumulative Distribution 1 - Cumulative Distribution 1 here represents the standard normal distribution function of stock price.
Volatile Underlying Stock - Volatile Underlying Stock is a stock with a price that fluctuates wildly hits new highs and lows or moves erratically.
Time to Expiration of Stock - Time to Expiration of Stock occurs when the options contract becomes void and no longer carries any value.

STEP 1: Convert Input(s) to Base Unit

Cumulative Distribution 1: 350 --> No Conversion Required
Volatile Underlying Stock: 195 --> No Conversion Required
Time to Expiration of Stock: 2.25 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

D₂ = D₁-v_us*sqrt(t_s) --> 350-195*sqrt(2.25)

Evaluating ... ...

D₂ = 57.5

STEP 3: Convert Result to Output's Unit

57.5 --> No Conversion Required

FINAL ANSWER

57.5 <-- Cumulative Distribution 2

(Calculation completed in 00.004 seconds)

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< 14 Forex Management Calculators

Black-Scholes-Merton Option Pricing Model for Call Option

Go Theoretical Price of Call Option = Current Stock Price*Normal Distribution*(Cumulative Distribution 1)-(Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock))*Normal Distribution*(Cumulative Distribution 2)

Cumulative Distribution One

Go Cumulative Distribution 1 = (ln(Current Stock Price/Option Strike Price)+(Risk Free Rate+Volatile Underlying Stock^2/2)*Time to Expiration of Stock)/(Volatile Underlying Stock*sqrt(Time to Expiration of Stock))

Fama-French Three-Factor Model

Go Excess Return on Asset = Asset Specific Alpha+Beta in Forex*(Return on Market Portfolio-Risk Free Rate)+(Sensitivity of the Asset to SMB*Small Minus Big+Sensitivity of the Asset to HML+Error Term)

Vasicek Interest Rate

Go Derivative of Short Rate = Speed of Mean Reversal*(Long Term Mean-Short Rate)*Derivatives*Time Period+Volatility at Time*Derivatives*Random Market Risk

Black-Scholes-Merton Option Pricing Model for Put Option

Go Theoretical Price of Put Option = Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock)*(-Cumulative Distribution 2)-Current Stock Price*(-Cumulative Distribution 1)

Forward Rate

Go Forward Rate = Spot Exchange Rate*ln((Domestic Interest Rate-Foreign Interest Rate)*Time to Maturity)

Cumulative Distribution Two

Go Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock)

Position Size in Forex

Go Position Size in Forex = (Account Equity*Risk Percentage in Forex)/(Stop Loss in Pips*Pip Value in Forex)

Profit for Call Buyer

Go Profit for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price)-Call Premium

Interest Rate Parity

Go Forward Rate Constant = Spot Exchange Rate*((1+Interest Rate of Quote Currency)/(1+Interest Rate of Base Currency))

Gordon Growth Model

Go Current Stock Price = (Dividend Per Share)/(Required Rate of Return-Constant Growth Rate of Dividend)

Payoff for Call Buyer

Go Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price)

Purchasing Power Parity Theory using Inflation

Go Exchange Rate Factor = ((1+Inflation in Home Country)/(1+Inflation in Foreign Country))-1

Intrinsic Value

Go Intrinsic Value = Share Price-Base Value

Cumulative Distribution Two Formula

Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock)
D₂ = D₁-v_us*sqrt(t_s)

Cumulative Distribution Two

Cumulative distribution model makes several assumptions, including constant volatility, no dividends paid during the option's life, and that the option can only be exercised at expiration (European option). It provides a theoretical framework for pricing options, and the calculated option prices are often used as a benchmark for comparing with market prices. Keep in mind that the model has limitations and may not perfectly reflect real-world market conditions.

How to Calculate Cumulative Distribution Two?

Cumulative Distribution Two calculator uses Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock) to calculate the Cumulative Distribution 2, The Cumulative Distribution Two formula is defined as a formula which essentially standardizes the inputs to reflect the relative size of the stock price, risk-free rate, volatility, and time to expiration in order to calculate the option's pricing parameters of both cumulative distributions. Cumulative Distribution 2 is denoted by D₂ symbol.

How to calculate Cumulative Distribution Two using this online calculator? To use this online calculator for Cumulative Distribution Two, enter Cumulative Distribution 1 (D₁), Volatile Underlying Stock (v_us) & Time to Expiration of Stock (t_s) and hit the calculate button. Here is how the Cumulative Distribution Two calculation can be explained with given input values -> 57.5 = 350-195*sqrt(2.25).

FAQ

What is Cumulative Distribution Two?

The Cumulative Distribution Two formula is defined as a formula which essentially standardizes the inputs to reflect the relative size of the stock price, risk-free rate, volatility, and time to expiration in order to calculate the option's pricing parameters of both cumulative distributions and is represented as D₂ = D₁-v_us*sqrt(t_s) or Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock). Cumulative Distribution 1 here represents the standard normal distribution function of stock price, Volatile Underlying Stock is a stock with a price that fluctuates wildly hits new highs and lows or moves erratically & Time to Expiration of Stock occurs when the options contract becomes void and no longer carries any value.

How to calculate Cumulative Distribution Two?

The Cumulative Distribution Two formula is defined as a formula which essentially standardizes the inputs to reflect the relative size of the stock price, risk-free rate, volatility, and time to expiration in order to calculate the option's pricing parameters of both cumulative distributions is calculated using Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock). To calculate Cumulative Distribution Two, you need Cumulative Distribution 1 (D₁), Volatile Underlying Stock (v_us) & Time to Expiration of Stock (t_s). With our tool, you need to enter the respective value for Cumulative Distribution 1, Volatile Underlying Stock & Time to Expiration of Stock and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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