1. Take the virtual tour of the Chicago Board Options Exchange at the following Web site. Then describe in a 1-page memo, for someone who has never visited an options exchange, what you "saw." (https://www.cboe.com)
2. Targezept Bionics, Inc., has a common stock outstanding that sells for $21 per share. A call option on the stock has an exercise price of $20 and will expire in three months.
Based on an analysis of the stock's past volatility, you have estimated the standard deviation of returns to be 0.6. The short-term interest rate is now 5 percent and you expect that to remain constant over the next six months. Use the Black-Scholes option pricing model to estimate the value of this option.