A Real Option Enables the Investor to Buy an Option for a Small

question 16

True/False

A real option enables the investor to buy an option for a small initial investment,hold it until a decision point arrives,and then exercise or abandon the option.

---

Definitions:

Budget Constraint

An economic model that represents all the combinations of goods and services that a consumer can afford, given current prices within his or her income level.

Opportunity Set

In finance and economics, the range of choices available to investors and consumers, including different combinations of goods, services, or assets that can be chosen for investment or consumption.

Gardenburgers

A brand of meatless burgers, often made from vegetables, grains, and legumes, targeting vegetarians and health-conscious consumers.

Budget Constraint

The restriction on the range of goods and services a consumer can purchase based on their income and the cost of these items.