Which of the Following Statements About "Real Options" Is True

question 15

Multiple Choice

Which of the following statements about "real options" is true?

• A)The existence of a real option may either increase or decrease the value of the project..
• B)The existence of a real option can lower the cost of capital associated with a project.
• C)Real options are very rare in practice.
• D)The existence of a real option may change the magnitude, but not the uncertainty, underlying expected future cash flows from the project.

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Definitions:

Bodily-Kinesthetic

An intelligence type described by Howard Gardner which highlights the capacity to control physical motion and handle objects skillfully.

Culturally Valued Products

Products, services, or practices that hold significant importance within a specific culture, often embodying the values, traditions, or social norms of that culture.

Howard Gardner

An American developmental psychologist best known for his theory of multiple intelligences, which suggests that there are various distinct types of intelligence.

Wechsler Intelligence Scale

A standardized test designed to measure a person's intellectual abilities and cognitive development.