Which Circumstance Will NOT Increase the Value of a Real

question 5

Multiple Choice

Which circumstance will NOT increase the value of a real option?

• A)lengthening the time in which a real option must be exercised
• B)an increase in the volatility of the underlying source of risk
• C)an increase in the risk-free rate
• D)an increase in the cost of obtaining the real option

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Definitions:

Big Government

A term used to describe a government or state that is perceived as excessively interventionist and invasive in the lives of its citizens, usually through large bureaucracy and extensive policies.

Federal Law

Refers to the body of law created by the federal government of a country, which applies to the entire nation and is supreme over state laws where there is conflict.

Constitutional Rights

Rights afforded to individuals by the constitution that protect freedoms and legal principles from government infringement.