The price of oil is currently at $24 but you expect it to either increase by 18 percent or decrease by 7 percent over the next 6 months. The 6-month risk-free rate of interest is 1.98 percent. What is the risk-neutral probability that the price will increase?

Group of answer choices

35.92%

32.47%

37.94%

38.06%

36.03%

2

Executive stock options generally have all of the following characteristics except:

Group of answer choices

putting executive pay at risk.

providing tax efficiency.

aligning executive goals with shareholder goals.

increasing executive base salaries.

linking executive compensation to performance.