Question 4 1. In the setting of a Black-Scholes model provide an explicit price of a European call option with terminal payoff g(ST) = ((ST)2 K)+ 2. Now consider an American option with expiration T whose payoff upon exercise at time I s T equals to g(S). Compute its price. (Hint: is it optimal to exercise this option early?] Question 4 1. In the setting of a Black-Scholes model provide an explicit price of a European call option with terminal payoff g(ST) = ((ST)2 K)+ 2. Now consider an American option with expiration T whose payoff upon exercise at time I s T equals to g(S). Compute its price. (Hint: is it optimal to exercise this option early?]