It is August 6. You are the president of a small electronics company. The company has some cash reserves that will not be needed for about 3 months, but interest rates are very low. Your chief financial officer (CFO) tells you that a progressive securities firm has an investment that guarantees no losses and allows participation in upward movements of the stock market. In fact, the total rate of return until the third week of November is to be determined by the formula \(\max (0, .25 r)\), where \(r\) is the rate of return on the S\&P 100 stock index during the 3-month period (ignoring dividends). The CFO suggests that this conservative investment might be an ideal alternative to participation in the interest rate market and asks for your opinion. You pick up The Wall Street Journal and make a few simple calculations to check whether it is, in fact, a good deal. Show these calculations and the conclusion. Data: A stock index is 14.2. There are two call options for November with strikes 410 and 420 and prices 13 and 7.5. The yield on November Treasury bills is 3.11 .