Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stocks current price, S₀, is $120, and a call option expiring in one year has an exercise price, X, of $120 and is selling at a price, C, of $5. With $12,000 to invest, you are considering three alternatives. a. Invest all $12,000 in the stock, buying 100 shares. b. Invest all $12,000 in 2,400 options (24 contracts). c. Buy 100 options (one contract) for $500, and invest the remaining $11,500 in a money market fund paying 5% in interest over 6 months (10% per year). What is your rate of return for each alternative for the following four stock prices in 6 months? (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Round the "Percentage return of your portfolio (Bills + 100 options)" answers to 2 decimal places.) The total value of your portfolio in six months for each of the following stock prices is:

The percentage return of your portfolio in six months for each of the following stock prices is:

Stock Price All stocks (100 shares) All options (2,400 options) Bills + 100 options $ Price of Stock 6 Months from Now 120 $ 100 $ 130 $ 140 Stock Price All stocks (100 shares) All options (2,400 options) Bills + 100 options 100 % Price of Stock 6 Months from Now $ 120 $ 130 % % $ 140 %