A compound option is an option with an underlying asset and another option with a different underlying asset (option on option). The exercise price of a compound option is a function of the price of the other option. Thus there are 2 strike prices (X1 and X2) and 2 maturities (T1 and T2), one for each option. If X1 and X2 are 2 and 8 respectively, and T1 and T2 are 1 and 2 years respectively, calculate the value of the compound option with underlying asset of the second option the IBM stock with the data of 1a. Both options are European.