Real options are a useful tool for thinking about strategic decisions under uncertainty,however,quantitative techniques designed to value financial options (e.g.the Black-Scholes option pricing model)cannot be applied to real options.

Question

Quizplus · Accepted Answer

This statement is false. While the Black-Scholes option pricing model was originally designed for financial options, it has been adapted and modified to also value real options. There are also other quantitative techniques and models, such as decision trees and Monte Carlo simulations, that can be used to value real options.

Real Options Are a Useful Tool for Thinking About Strategic