Question

A real option enables the investor to buy an option for a small initial investment, hold it until a decision point arrives, and then exercise or abandon the option. true or false?

Answer 1

The statement,"A real option enables the investor to buy an option for a small initial investment, hold it until a decision point arrives, and then exercise or abandon the option." is False .

Explanation:

A real option is to give corporate investment options to a company's executives. It is called "actual" because it usually refers to projects that involve a tangible asset rather than a financial product. Physical assets such as equipment, capital assets and the products are tangible assets.

The decision to extend or delay or wait or to leave a proposal may be real options. Real options require decisions or preferences that give people discretion and possible benefits when making financial decisions.