Stock X is currently trading at 50 and will pay no dividends over the next year. Over the next year the stock price can go up to 60 or down to 40. The annual risk-free rate is 2%. a) (5 marks) What is the price of a European call option today, on the Stock X, that has a strike price of 50 and expires in one year? b) (5 marks) A European put option on Stock X with a strike price of 50 and one year to maturity is trading at 5 today. Is there any arbitrage opportunity? If so, describe how you can take advantage of this opportunity and what profit you can achieve. c) (5 marks) Calculate the one-year return, for each possible stock price outcome, of investing in one stock, and the one-year return of investing in the European Call. Use your results to discuss the use of stocks and options for speculation purposes