A call option on real assets represents a proposed project that contains an option of pursuing an additional venture.

Question

Quizplus · Accepted Answer

A call option on real assets gives the holder the right, but not the obligation, to pursue an additional venture related to the underlying assets. This additional venture is often contingent on the success of the initial project, and allows the holder to capture additional value if the project performs well.

A Call Option on Real Assets Represents a Proposed Project