Which of the Following Statements Is FALSE

question 22

Multiple Choice

Which of the following statements is FALSE?

• A)It is tempting to use the Black-Scholes formula to value future growth options,but often there are good reasons why this formula might not price these options correctly.
• B)When a firm has a real option to invest in the future it is known as a growth option.
• C)Because growth options have value,they contribute to the value of any firm that has future possible investment opportunities.
• D)Future growth opportunities can be thought of as a collection of real put options on potential projects.

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Definitions:

Promisee

The person to whom a promise is made in a contract, who stands to benefit from the fulfillment of the promise.

Bind

To legally obligate oneself or another party to a contract or agreement, making it enforceable by law.

Illusory

Pertaining to an agreement or promise that lacks real consideration or enforceability, making it seem valid but without substance.

Video Games

Electronic games played through consoles, computers, or mobile devices, characterized by interactive gameplay and visual feedback.