Which of the following statements is false?
A) Abandonment options can add value to a project because a firm can drop a project if it turns out to be unsuccessful.
B) Corporate bonds often contain embedded abandonment options; the issuing firm sometimes has the option to convert the bond - that is, to repay it.
C) An abandonment option is the option to walk away.
D) An important abandonment option that most people encounter at some point in their lives is the option to abandon their mortgage.

Question

Quizplus · Accepted Answer

B) Corporate bonds often contain embedded abandonment options; the issuing firm sometimes has the option to call the bond - that is, to repay it.

Which of the Following Statements Is False