The Price of Oil Is Currently at $24 but You

question 29

Multiple Choice

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 probability that the price will increase?

• A)32.47 percent
• B)36.03 percent
• C)38.06 percent
• D)35.92 percent
• E)37.94 percent

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Definitions:

Encoding

The initial process of transforming sensory input into a form or format that can be stored in memory.

Rehearsing

The act of practicing or repeating information to aid in memory retention.

Long-Term Potentiation

A long-lasting increase in the strength of synaptic responsiveness, thought to be a biological mechanism of long-term memory.

Long-Term Memory

Long-term memory is a type of memory responsible for the storage of information over an extended period, ranging from days to decades, and includes both conscious and unconscious information.