Real Option Valuation Requires a Thorough Knowledge of fiNancial Option

question 27

Multiple Choice

Real option valuation requires a thorough knowledge of financial option valuation.Consider the following two statements:
(i) Most real option problems require a European style option valuation technique.
(ii) The most important difference between real and financial options is the fact that real options are
Never exercised.

• A)(i) is correct, (ii) is incorrect.
• B)(i) is incorrect, (ii) is correct.
• C)Both (i) and (ii) are correct.
• D)Both (i) and (ii) are incorrect.
• E)None of the above.

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Definitions:

Objection Handling

The practice of addressing and overcoming potential concerns or objections that a customer has towards purchasing a product or service.

Direct Denial

The method of overcoming objections through the use of facts, logic, and tact.

Competitor's Model

A reference to a product offered by a competing business, often used for comparison in sales and marketing strategies.

Prospect's Objection

A potential customer's resistance or challenge to a sales pitch or proposal.