The Advantage of a Real Option Investment Is That a Firm

question 163

Multiple Choice

The advantage of a real option investment is that a firm can ________ when the competitive environment shifts.

• A) be the industry leader
• B) preserve flexibility to be well positioned
• C) be stronger financially
• D) be positioned to neutralize threats from smaller firms

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Definitions:

Evolution

The concept that different species are descended from common ancestors but have evolved over time, acquiring different genetic characteristics as a function of different environmental demands.

Natural Selection

A fundamental mechanism of evolution where organisms better adapted to their environment tend to survive and produce more offspring.

Variability

The degree to which different data points in a set differ from each other and from their average value.

Competition

A situation in which individuals or groups strive against one another to achieve a goal that is limited and cannot be shared.