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

question 4

Multiple Choice

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

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

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Definitions:

French law

The legal system of France, which includes principles and laws applicable within the French territory, covering various aspects like civil, commercial, employment, and administrative law.

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