Which of the Following Will NOT Increase the Value of a Real

question 2

Multiple Choice

Which of the following will NOT increase the value of a real option?

• A) Lengthening the time in which a real option must be exercised.
• B) An increase in the volatility of the underlying source of risk.
• C) An increase in the risk-free rate.
• D) An increase in the cost of obtaining the real option.
• E) A decrease in the probability that a competitor will enter the market of the project in question.

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Definitions:

Employment Discrimination

Unfair treatment of employees or job applicants based on race, gender, age, religion, nationality, physical disabilities, or sexual orientation, rather than on their qualifications or performance.

Productivity Factors

Elements that contribute to the efficiency with which inputs are converted into outputs, such as technology, innovation, and labor skills.

Mean Earnings

The average income that a group of individuals or entities earns over a specified period.

Earnings Ratio

A financial metric comparing one aspect of a company's financial performance, such as earnings, to another, such as its share price.