A heuristic approach to explaining of the Black-Scholes option pricing model in undergraduate classes is described. The approach draws upon the method of protocol analysis to encourage students to "think aloud" so that their mental models can be surfaced. It also relies upon extensive visualizations to communicate relationships that are…

The extreme interval values and statistics (expected value, median, mode, standard deviation, and coefficient of variation) for the smallest (min) and largest (max) values of exponentially distributed variables with parameter ? = 1 are examined for different observation (sample) sizes. An extreme interval value g[subscript a] is defined as a…