1. Consider a stock with price S = $100 at t = 0. The interest rate is 10% compounded continuously. (a) [10pts] Determine the upper and lower bounds on the price of a European call option at t = 0 with strike price $120 and expiration T = 1 year. (b) [10pts) If the price of a European call with strike price $120 and expiration T = 1 year at t = 0 is $50, use put-call parity to determine the price of a European put option with the same strike price and expiration date