The Black-Scholes-Merton Model for European call option on stock and the Black Model for European call option on forward (future) are two pricing models that can potentially be used to determine the theoretical price for an American call option on the forward contract. A. Explain intuitively why American call option on future could be early exercised? B. Explain why the Black Model can be used to determine the price of the American call option on the forward contract. C. The price of a forward contract is 139.19. The American option on the forward contract expires in 215 days. The exercise price is 125. The continuously compounded risk-free rate is 4.25 percent. The volatility is 0.15. Use the Black model to determine the price of this call option. D. Determine the price of the underlying (spot) from the above information and use the Black- Scholes-Merton model to show that the price of an option on the underlying (spot) is the same as the price of the option on the forward. The Black-Scholes-Merton Model for European call option on stock and the Black Model for European call option on forward (future) are two pricing models that can potentially be used to determine the theoretical price for an American call option on the forward contract. A. Explain intuitively why American call option on future could be early exercised? B. Explain why the Black Model can be used to determine the price of the American call option on the forward contract. C. The price of a forward contract is 139.19. The American option on the forward contract expires in 215 days. The exercise price is 125. The continuously compounded risk-free rate is 4.25 percent. The volatility is 0.15. Use the Black model to determine the price of this call option. D. Determine the price of the underlying (spot) from the above information and use the Black- Scholes-Merton model to show that the price of an option on the underlying (spot) is the same as the price of the option on the forward