The greater the uncertainty,the more valuable a real option is.

Question

Quizplus · Accepted Answer

A real option provides the right, but not the obligation, to undertake a certain business decision in the future. In situations of high uncertainty, the value of real options increases as they provide the flexibility to make adaptive decisions based on new information or changes in the environment. Therefore, the greater the uncertainty, the more valuable a real option becomes.

The Greater the Uncertainty,the More Valuable a Real Option Is