Question: Heading 3 Heading 4 14. A price-linked derivative security pays $300 if the oil price over the next year increases by more than 5%, an

Heading 3 Heading 4 14. A price-linked derivative security pays $300 if the oil price over the next year increases by more than 5%, an event that can happen with a 60% probability. Otherwise, it pays $50. If the expected return on the security is 15%, how much does the security cost? Show your calculations

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