IPlease help ASAP solve part $3.$ Please give proper amount of decimals.

ntro

An investor believes that the Cisco stock price is going to increase in the following $12$ months from the current stock price of $$200.$ Call options on Cisco stock expiring in $12$ months have a strike price of $$208$ and sell at a premium of $$20$ each. The investor has $$10,000$ to invest, and is considering $3$ alternatives:

Purchase $500$ call options.

Purchase $50$ shares.

Invest $$9,000$ in a money market fund returning $8\%$ per year and buy $50$ call options with the remaining money.

Assume that the stock price will be $$240$ per share after $12$ months.

Attempt $1/10$ for $10$ pts$.$

Part $1$

What will be the investor's rate of return for alternative $1?$

$0\mathrm{.}6$

Correct $$

Because the Cisco stock price is above the strike price the investor will exercise the options.

Option payoff on the expiration date

$=$ ST $-$ X

$=240-208$

$=32$

Net profit

$=$ Number of options $*($Payoff $-$ Premium$)$

$=500*(32-20)$

$=6,000$

Rate of return:

r $=$ Profit $/$ Investment

$=6,000/10,000$

$=0\mathrm{.}6$

Attempt $1/10$ for $10$ pts$.$

Part $2$

What will be the investor's rate of return for alternative $2?$

$0\mathrm{.}2$

Correct $$

Rate of return:

r $=$ Value of shares $/$ Investment $-1$

$=(50*240)/10,000-1$

$=0\mathrm{.}2$

Attempt $2/10$ for $8\mathrm{.}5$ pts$.$

Part $3$

What will be the investor's rate of return for alternative $3?$

$3+$ decimals