Real Options Can Have the Effect of

question 5

Multiple Choice

Real options can have the effect of

• A) increasing a project's NPV.
• B) reducing a project's risk.
• C) gaining information about future opportunities.
• D) all of the above.

---

Definitions:

Dominant Firm

A company that has a large market share in an industry, allowing it to set prices or conditions under which other firms operate.

Market Equilibrium

A situation where the supply of a good or service is equal to the demand for it, resulting in stable prices.

Homogeneous Products

Goods that are perfectly identical in quality, size, and features, making them indistinguishable to consumers from multiple producers.

Luxury Yachts

Luxury yachts are high-end, luxurious boats that are often equipped with sophisticated amenities and are used for personal or commercial pleasure.