The value of a real option varies with all of the following, EXCEPT:
A)the range of outcomes.
B)the rate of interest.
C)the rate of unemployment.
D)the delay in resolving uncertainty.

Question

Quizplus · Accepted Answer

The rate of unemployment is not a relevant factor in determining the value of a real option. The other options listed can all affect the value of a real option. The range of outcomes and the delay in resolving uncertainty can increase the value of the option, while the rate of interest can have a negative impact on the value of the option.

The Value of a Real Option Varies with All of the Following