8. True/False Questions

1. An American Call option price should be equal to the price of an European Call option price with all other parameters equal.

2. If you are convincing a person to switch from a small scale project A to a larger scale project B, it is enough to show that the PI for the incremental project B-A is >1

3. The price of a European Put option falls with a rise in interest rates.

4. For a simple investment or a financing project, the IRR is always unique.

5. For independent projects, The PI rule and the NPV rules always give you the same answer.