Real options are most valuable when the underlying source of risk--such as uncertainty about unit sales,or the sales price,or input costs--is very low.

Question

Quizplus · Accepted Answer

Real options are most valuable when the underlying source of risk is high, not low. Real options help firms to manage risks and create options for themselves by allowing flexibility in their investment decisions. High levels of uncertainty and risk create a greater need for real options.

Real Options Are Most Valuable When the Underlying Source of Risk--Such