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A firm is ready to commit to a project that has a positive NPV but also much uncertainty attached to it. Should conditions change for
A firm is ready to commit to a project that has a positive NPV but also much uncertainty attached to it. Should conditions change for the better, it's likely that the firm will invest additional resources, and if conditions change for the worse, the firm may remove resources. What type of option describes this situation?
A call option | ||
A combination of selling short and a call option | ||
A put option | ||
A real option | ||
A combination of a call option and a put option |
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