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:

Collective Organizations

Groups or entities that operate based on collective decision-making and shared objectives or values.

Economic Rewards

Benefits or incentives, often financial, given to individuals or groups as recognition for their contributions or achievements.

Sexual Harassment

Unwelcome or inappropriate sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature in a workplace or other professional or social situation.