The following steps should be followed to solve this problem.
1. Run cmd as Administrator.
2. Navigate to the directory where the your setup.exe resides for oracle 11g using the cmd.
3. Type the following command and press enter.
Remember to give the path to where your java jdk is installed in your system here. Most importantly, I have used PROGRA~1 as a replacement for the string "Program Files". The reason for the installer to hang at step 4 is it cannot find the correct path to the JDK when the path contains spaces.
Use PROGRA~2 as a replacement for the string "Program Files (x86)". This depends on where your JDK is installed.
setup.exe -jreLoc C:\PROGRA~1\Java\jdk1.8.0_40
Cheers :)
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