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Which of the following statements is FALSE? A A key distinction between a real option and a financial option is that real options, and the

Which of the following statements is FALSE?

A

A key distinction between a real option and a financial option is that real options, and the underlying assets on which they are based, are often traded in competitive markets.

B

In particular, because real options allow a decision maker to choose the most attractive alternative after new information has been learned, the presence of real options adds value to an investment opportunity.

C

We can compute the value of the real option by comparing the expected profit without the real option to the value with the option.

D

To make an investment decision correctly, the value of embedded real options must be included in the decision-making process.

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