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:

Paint Method

A method used in graphical user interfaces to draw and repaint components on the screen.

Graphics Class

A class in many programming libraries that provides methods for drawing text, shapes, and images on display devices or off-screen images.

Insets Class

A representation of the borders of a container to specify the space that a container must leave at each of its edges.

Java.awt

A Java package, standing for Abstract Window Toolkit, that provides a set of APIs for creating graphical user interfaces and painting graphics and images.