Which of the Following Statements Is False

question 36

Multiple Choice

Which of the following statements is false?

• A) An alternative to using the Black-Scholes formula is to compute the value of growth options using risk-neutral probabilities.
• B) Future growth options are not only important to firm value, but can also be important in the value of an individual project.
• C) While the Black-Scholes formula values American options, most growth options cannot be exercised at any time.
• D) Out-of-the-money calls are riskier than in-the-money calls, and because most growth options are likely to be out-of-the-money, the growth component of firm value is likely to be riskier than the ongoing assets of the firm.

Recognize the concept of time compression in simulation and its practical implications.

Differentiate between random numbers and random number intervals within the context of simulation.

Understand real-world applications of simulation and the process of setting up and analyzing simulation models.

Understand the principles of perceptual organization and the Gestalt laws.