Using excel

3. Produce a graph comparing a call's intrinsic value [defined as max(S X, 0)] and its Black-Scholes price. From this graph you should be able to deduce that it is never optimal to exercise early a call priced by the Black-Scholes. Produce a graph comparing a puts intrinsic value [= max(X - 5,0)] and its Black-Scholes price. From this graph you should be able to deduce that it may be optimal to exercise early a put priced by the Black-Scholes formula. 4. 3. Produce a graph comparing a call's intrinsic value [defined as max(S X, 0)] and its Black-Scholes price. From this graph you should be able to deduce that it is never optimal to exercise early a call priced by the Black-Scholes. Produce a graph comparing a puts intrinsic value [= max(X - 5,0)] and its Black-Scholes price. From this graph you should be able to deduce that it may be optimal to exercise early a put priced by the Black-Scholes formula. 4