Which One of the Following Will NOT Increase the Value

question 28

Multiple Choice

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

• A) Lengthening the time during 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:

Personal Fable

A cognitive distortion experienced during adolescence, where the individual believes their thoughts, feelings, and experiences are unique and not understood by others.

Risky Behavior

Risky behavior encompasses actions that potentially expose individuals to harm or significant risk of negative consequences.

Adolescents

Individuals in the transitional stage of human development between childhood and adulthood, typically ranging from ages 13 to 19, experiencing significant physical, emotional, and social changes.

Electrical Brain Waves

Oscillating electrical voltages in the brain, measurable by EEG, that reflect different states of brain activity.