ROPMs (Real Options Pricing Models)value Information Systems Similar to Stock

question 32

Multiple Choice

ROPMs (real options pricing models) value information systems similar to stock options,in that

• A)ROPMs can be bought and sold like stocks.
• B)a company's worth can be evaluated by the worth of their ROPMs.
• C)initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date.
• D)expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options.
• E)the price paid today for information systems reflects their future cash flows.

---

Definitions:

Iron

A chemical element with symbol Fe and atomic number 26, known for its high strength and magnetic properties.

Limiting Reactant

The reactant in a chemical reaction that limits the amount of product that can be formed because it is used up first.

Theoretical Yield

The maximum amount of product that can be generated from a given amount of reactants in a chemical reaction, under ideal conditions.

Limiting Reactant

The reactant in a chemical reaction that limits the amount of product that can be formed; the reaction stops when all of this reactant is consumed.