Which of the Following Best Describes Real Options

question 9

Multiple Choice

Which of the following best describes real options?

• A)Real options change the size, but not the risk, of projects' expected cash flows.
• B)Real options change the risk, but not the size, of projects' expected cash flows.
• C)Real options are likely to reduce the cost of capital that should be used to discount a project's expected cash flows.
• D)Very few projects actually have real options.

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Definitions:

Cannabis

The hemp plant from which marijuana, hashish, and THC are derived.

Hashish

A drug made from the resin of the cannabis plant, commonly used for its psychoactive effects.

Peyote Cactus

A small, spineless cactus with psychoactive alkaloids, particularly mescaline, used traditionally by Native Americans for religious ceremonies and healing.

Hallucinogens

A class of psychoactive substances that cause changes in perception, mood, and cognitive processes, leading to experiences of seeing, hearing, or feeling things that are not there.