You Are a Gold Producer and Have Noticed That the Value

question 72

Multiple Choice

You are a gold producer and have noticed that the value of your business may increase even though the price of gold falls.Your explanation for this phenomenon is

• A) that the relationship between the value of future cash flows and interest rates is positive.
• B) that increased risk may increase the real option value of the firm.
• C) that cheaper gold prices are good for the economy and that must be good for the firm.
• D) none of the above

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Definitions:

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An institution for educating children.

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Referring to experiences or events that are emotionally disturbing or distressing, capable of causing long-term psychological impact.

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Explosions resulting from bombs, which can cause widespread damage and loss of life.

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Service in the armed forces of a country, whether voluntary or compulsory.