Real option valuation requires a thorough knowledge of ﬁnancial option valuation.Consider the following two statements:
(i) Most real option problems require a European style option valuation technique.
(ii) The most important difference between real and ﬁnancial options is the fact that real options are
Never exercised.
A)(i) is correct, (ii) is incorrect.
B)(i) is incorrect, (ii) is correct.
C)Both (i) and (ii) are correct.
D)Both (i) and (ii) are incorrect.
E)None of the above.

Question

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The Answer of Real option valuation requires a thorough knowledge of ﬁnancial option valuation.Consider the following two statements:
(i) Most real option problems require a European style option valuation technique.
(ii) The most important difference between real and ﬁnancial options is the fact that real options are
Never exercised.
A)(i) is correct, (ii) is incorrect.
B)(i) is incorrect, (ii) is correct.
C)Both (i) and (ii) are correct.
D)Both (i) and (ii) are incorrect.
E)None of the above.

Real Option Valuation Requires a Thorough Knowledge of ﬁNancial Option