the company's stock price (over and above the current price) up to an increase of $10; for every dollar increase over $10, the executive will receive $500,000. The current price of the stock is $1451/8. The risk-free rate is 6.36%. You remember from a few months back that all really revolves around the volatility of the company's stock and you happen to have a newspaper that gives the prices of current options on the stock with the same 64-day maturity: $145 1/8 Current stock price Exercise price Option price Option 1 $140 $11.534 $145 18 Option 2 $150 $6.509 $14518 Option 3 $160 $3.325 Try to come up with a single volatility that best predicts the observed prices and proceed to evaluate the value of the compensation contract.