7. Introduction to real options Aa Aa Consider the following statement about real options: Decision tree analysis is more commonly used in valuing securities than real assets. True or False: The preceding statement is correct O False O True Which type of real option allows a firm to postpone a project until it can gather more information? O Flexibility option O Timing option O Abandonment option Expansion option nsider the following example Clemens Inc. is considering a $100 million investment in a new line of soft drinks. However, $100 million is a huge investment for Clemens; if things turn bad, it cou smaller investment of $20 million to see if the market is as strong as they hope it is. If demand is strong opportunity is still available, Clemens will increase its investment at a later date. ld wipe out the company. A few senior managers have suggested a and the This example describes a real option to abandon expand