Produce a graph comparing a calls intrinsic value [defined as max(S-X,0)] and its Black-Scholes price. Stock prices to produce respective intrinsic values should start at
Produce a graph comparing a calls intrinsic value [defined as max(S-X,0)] and its Black-Scholes price. Stock prices to produce respective intrinsic values should start at 36 and end at 68 (units of 2). From this graph provide an explanation why it is never optimal to exercise early a call priced by the Black Scholes. Use inputs below: S 50 X 50 r 10.00% T 0.5 Sigma 25% Please put in excel
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Authors: George H. Pink, Paula H. Song
8th Edition
1640551093, 978-1640551091
