Managers who hold real options can view:
A) themselves as passive onlookers with no decision making opportunities.
B) these as tools for reducing the total risk of the firm through diversification.
C) these as opportunities to alter management decisions in the future.
D) themselves as agents who are looking for higher compensation.

Question

Quizplus · Accepted Answer

Real options provide managers with opportunities to alter management decisions in the future. They allow managers to delay or expand projects based on market conditions and changes in the external environment. Real options give managers flexibility and strategic advantage in decision making, allowing them to capitalize on potential opportunities that may arise in the future. Therefore, option C is the most appropriate choice as it accurately reflects the benefits of real options for managers.

Managers Who Hold Real Options Can View