Real options are all about the flexibility afforded a firm under conditions of ________.
A)competition
B)risk
C)uncertainty
D)growth

Question

Quizplus · Accepted Answer

Real options are primarily used to address uncertainty, which allows firms to make strategic decisions based on potential future events. These decisions are often irreversible, and the value of the real options framework is that it allows for the management of uncertainty and unexpected events. This is different from traditional financial options, which only deal with market price fluctuations. Real options provide firms with the flexibility to respond to changing market conditions or unexpected events, reducing risk and maximizing potential returns.

Real Options Are All About the Flexibility Afforded a Firm