One of the Major Differences Between a Real Option and a Financial

question 27

Multiple Choice

One of the major differences between a real option and a financial option is that

• A) a real option is not traded in competitive markets.
• B) a real option is traded in competitive markets.
• C) a real option is less risky than a financial option.
• D) a real option has more risk than a financial option.

---

Definitions:

Low-risk

A description of investments or activities that have a minimal chance of loss or failure.

Equity

The residual interest or ownership rights in the assets of a company after deducting its liabilities, often reflected as shareholders' equity.

Assets

Economic resources owned or controlled by a business or individual that are expected to provide future benefits.

Liabilities

Financial obligations or debts owed by a business to external parties or entities.