Which of the Following Statements Is FALSE

question 21

Multiple Choice

Which of the following statements is FALSE?

• A)In particular,because real options allow a decision maker to choose the most attractive alternative after new information has been learned,the presence of real options adds value to an investment opportunity.
• B)To make an investment decision correctly,the value of embedded real options must be included in the decision-making process.
• C)A key distinction between a real option and a financial option is that real options,and the underlying assets on which they are based,are often traded in competitive markets.
• D)We can compute the value of the real option by comparing the expected profit without the real option to the value with the option.

---

Definitions:

Commercial Infant Formula

Manufactured food designed for feeding babies under 12 months old, intended as a substitute or supplement to human milk.

Whole Milk

Milk from cows that retains its full amount of fat, typically containing about 3.25% milk fat.

Teething

The process in which an infant's teeth sequentially appear by breaking through the gums.

Lower Central Incisors

The two front teeth located at the bottom center of the human dental arch, primarily used for cutting food.