A real option enables the investor to buy an option for a small initial investment,hold it until a decision point arrives,and then exercise or abandon the option.

Question

A real option enables the investor to buy an option for a small initial investment,hold it until a decision point arrives,and then exercise or abandon the option.

Quizplus · Accepted Answer

This is a correct definition of a real option. Real options provide a flexible investment strategy that can help investors make better decisions in uncertain environments. They allow investors to defer a decision until more information is available, which can reduce risk and increase the potential for profit.

A Real Option Enables the Investor to Buy an Option for a Small