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Math Help - Probability

  1. #1
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    Probability

    I have a problem I can't solve and I need help =)

    I have this model
    Probability-skaermavbild-2013-04-17-kl.-14.16.58.png
    So=75 K=80 r=0,02 sigma=0,25 T=1
    which gives me: ln(75/80)+(0,002-(1/2*o,252)*1/o,25*1 = -0,3032
    Since its probability it can't be negative...??
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  2. #2
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    Re: Probability

    Is part of that equation (r-\frac{1}{2}\cdot \sigma^2) or (r-\frac{1}{2\sigma^2}) or (r-\frac{1}{2})\cdot \sigma^2 or \frac{r-1}{2\sigma^2}
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