The major principles to remember when considering real options include all of the following EXCEPT:
A)out-of-the-money real options have value.
B)in-the-money real options need to be exercised immediately.
C)waiting is valuable.
D)create value by exploiting real options.

Question

Quizplus · Accepted Answer

In-the-money real options do not need to be exercised immediately. The value of real options lies in the flexibility to wait and take advantage of opportunities as they arise. Out-of-the-money real options can still have value if there is potential for the underlying asset or market to change in the future. Creating value through real options involves identifying and exploiting opportunities to increase potential future cash flows.

The Major Principles to Remember When Considering Real Options Include