The price of a stock is currently $100. The stock price is expected to go up by 10% or down by 10% by the end of the year. The risk-free interest rate of return is 8%. Assume contin- uous compounding. Please use the one-period binomial tree model to answer the following questions. You need to set up the one-period binomial tree first, and then find the replicating portfolio by solving the equation system, then find the option price. (a) What is the value of a 1-year European call option with a strike price of $100, in an arbitrage-free economy? (b) What is the value of a 1-yearEuropean put option with a strike price of $100, in an arbitrage-free economy? (c) Verify your answers using put-call parity.