The size of the physical address space of a processor is 2³² bytes. The capacity of a cache memory unit is 2²³ bytes. The cache block size is 128 bytes. The cache memory unit can be built as a direct mapped cache or as a K-way set-associative cache, where K = 2^L and L ∈ {1, 2, 3}. Let the length of the TAG field be M bits for the direct mapped cache, and N bits for the set-associative cache.

Which one of the following options is true?