Which of the Following Statements Is FALSE

question 14

Multiple Choice

Which of the following statements is FALSE?

• A)Abandonment options can add value to a project because a firm can drop a project if it turns out to be unsuccessful.
• B)Corporate bonds often contain embedded abandonment options: The issuing firm sometimes has the option to convert the bond-that is,to repay it.
• C)An abandonment option is the option to walk away.
• D)An important abandonment option that most people encounter at some point in their lives is the option to abandon their mortgage.

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Definitions:

Lewis Structures

Diagrams that represent the bonding between atoms of a molecule and the lone pairs of electrons that may exist in the molecule.

Molecular Formula

A notation that uses chemical symbols and numerical subscripts to represent the types and quantities of atoms in a molecule.

Valence

The combining capacity of an element or particle, often determined by the number of electrons that an atom can share, gain, or lose.

Formal Charge

A concept in chemistry that represents the charge assigned to an atom in a molecule, assuming that electrons in all chemical bonds are shared equally between atoms, irrespective of electronegativity.