The Estimated Value of a Real Option

question 60

Multiple Choice

The estimated value of a real option:

• A) Is affected by essentially the same set of factors that affect the value of financial options.
• B) Cannot be incorporated into a conventional DCF analysis of an investment project.
• C) Is affected by the length of the expiration date of the option.
• D) Decreases as the underlying risk of a project increases.
• E) Is inversely related to estimated volatility of returns for a proposed project.

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