entire six month period. Then for comparison purposes, calculate historical volatilities over the first three months, the last three months, and all six months combined using both daily and weekly data.* Using the Excel spreadsheet HistoricalVolatility1 0exism, report these estimates in Exhibit 5. Are these estimates sensitive to the choice of time period or observational frequency? b) Estimate implied volatility for each index to four decimal places. For these estimates use data in Tables 1 and 3 of SecondCityOptionsCase_Datal Oe.xlex. Restrict your attention to the six call and put options expiring on August 18, 2007, that are at-the-money or closest to at-the-money. Use Excel spreadsheets such as BlackScholesMerton Binomiall Oe.xism or BlackScholesMertonImpliedVolatility De.xism. Give your implied volatility estimates in Exhibit 6. Recall that the Black-Scholes-Merton model can be used for the SPX estimate, but not for the OEX estimate. Thus, you must use your best judgment in order to estimate implied volatility for OEX. Whatever methodology you use, explain it clearly. Discuss the advantages and disadvantages of historical estimates versus implied estimates. Then provide one final volatility estimate for each index and explain your reasoning