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.

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Definitions:

Normative

Relating to prescriptive or value-based judgments, indicating what should be rather than what is.

Oil Imports

The purchase of foreign-sourced oil for domestic use, reflecting a country's demand for energy resources not available within its own borders.

Normative Statement

An opinion-based statement that reflects values or judgments and cannot be tested or disproven by observation.

Positive

In the context of economic analysis, it often refers to a fact-based approach that attempts to describe how economic systems actually work without making judgments about their desirability.