TRUE OR FALSE:

consider the following scenario in the binomial model: Suppose the current price of oil is S0 = $100 and next year the price will either go up to S1,u = $120 or down to S1,d = $80. The risk-free rate is 5% EAR. The futures price for delivery of oil at T = 1 is F0 = $108.

(d) T or F, In this scenario, we can find the risk-neutral probability of up using the equation S0 = EQ[S1] 1 + rrf or 100 = 120q + 80(1 q)

(e) T or F, In this scenario, we can find the risk-neutral probability of up using the equation F0 = EQ[F1] 1 + rrf or 108 = 120q + 80(1 q) 1.05

(f) T or F, In this scenario, we can find the risk-neutral probability of up using the equation 0 = E Q[CF1] or 0 = 12q + (28)(1 q)

(g) T or F, In this scenario, we can find the risk-neutral probability of up using the equation F0 = E Q[F1] or 108 = 120q + 80(1 q)