Exercise 1. Consider a one step binomial model. The initial stock price is $50. There is a 80% chance the stock price will rise to $65 and a 20% chance it will fall to $40. The risk free bond gets 2%. Price a call option with strike of $50. Price a put option with strike of $50. Does put-call parity hold? Show whether it does or does not. What would the option prices be if the probabilities were 30% chance the stock price rises and 70% chance it falls