Exercise 1. Consider a one step binomial model. The initial stock price is $80. There is a 60% chance the stock price will rise to $90 and a 40% chance it will fall to $75. The risk free bond gets 5%. Price a call option with strike of $80. Price a put option with strike of $80. Does put-call parity hold? Show whether it does or does not. What would the option prices be if the probabilities were 70% chance the stock price rises and 30% chance it falls