suppose that the exchange rate is 1 dollar for 120 Yen. The dollar interest rate is 5%(continuously compounded) and the yen rate is 1%(continuously compounded). Consider an at the money American dollar call that is yen-denominated. The option has 1 year to expiration and the exchange rate volatility is 10%. Let n=3.

1) What is the price of a European call? An American call?

2)What is the price of a European put? An American put?

3)How do you account for the pattern of early exercise across the two options?