Some of the Most Common Applications of Real Options Are

question 82

Multiple Choice

Some of the most common applications of real options are with property and insurance.A real estate option grants the holder the right to buy or sell a piece of property at an established price sometime in the future.If the price of the property goes ________,the owner of the option is likely to buy it.If the market value of the property ________ the strike price,the option holder is unlikely to execute the purchase.

• A) down; goes above
• B) down; drops below
• C) up; drops below
• D) up; goes above

Distinguish between movements along a budget line and shifts of the budget line itself.

Appreciate the conceptual similarity between topographic and indifference maps.

Recognize how changes in the prices of goods affect consumer's purchasing decisions.

Identify how income changes affect the consumer's ability to achieve higher levels of utility.

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Definitions:

Scientific Method

Systematic method of obtaining and evaluating information relevant to a problem.

Variable

Measurable factor or characteristic that can vary within an individual, between individuals, or both.

Dependent Variable

In experimental and statistical research, the variable being tested and measured, which is expected to change as a result of manipulations to the independent variable.

Hypothesis

Testable statement about two or more variables and the relationship between them.