Answer part 3 only

An investor believes that the Cisco stock price is going to increase in the following 12 months from the current stock price of $200. Call options on Cisco Stock expiring in 12 months have a strike price of $216 and sell at a premium of $20 each. The investor has $18,000 to invest, and is considering 3 alternatives: 1. Purchase 900 call options. 2. Purchase 90 shares 3. Invest $16,200 in a manay marikat tund natuming 9% per year and buy 90 call options with the remaining money. Assume that the stock price will be $223 par share after 12 months. Attempt 3/3 for opis Part 1 What will be the investor's rate of return for aterative 17 .650 Incorrect Because the Cisco stock price is above the strike price the investor will exercise the options Option payoff on the expiration date = S-X = 233-216 = 17 Not rate = Number of options Payol - Premium) = 900 (17. 201 = -2.700 Rate of return r = Profit Investment = -2.700 / 18.000 = -0.16 Attempt 1/3 for 9.5 pls Part 2 What will be the investor's rate of return for alternative 2? .165 Corect Rate of return; r = Value of shares / Investment - 1 = 190 233/18.000 - 1 = 0.185 Attempt 2/3 for 9.5 pts. Part 3 What will be the investor's rain of return for alternative ? + decimals