The following are examples of "disguised options":
A)acquiring growth opportunities.
B)ability of the firm to terminate a project when it is no longer profitable.
C)acquiring growth opportunities and covenants within corporate securities that provide flexibility to change the terms of the securities.
D)acquiring growth opportunities, ability of the firm to terminate a project when it is no longer profitable, and covenants within corporate securities that provide flexibility to change the terms of the securities.

Question

Quizplus · Accepted Answer

Disguised options refer to features or benefits that may not be readily apparent in a financial instrument or investment, but that add value or flexibility to the holder. Option A is not specific enough, and Option B only refers to one disguised option. Option C includes one disguised option, but the best choice is Option D, which includes all three examples of disguised options listed in the prompt.

The Following Are Examples of "Disguised Options