When there is high uncertainty,investors are more likely to hold off on potential investment projects that:
A) are irreversible.
B) are reversible.
C) have many substitutes.
D) have low adjustment costs.

Question

Quizplus · Accepted Answer

When there is high uncertainty, investors are less likely to make irreversible investments as they are perceived as riskier and have the potential for higher losses. In contrast, reversible investments are more flexible and can be adjusted or discontinued if the situation changes, making them more attractive during times of uncertainty. Therefore, option A is the best choice in this scenario.

When There Is High Uncertainty,investors Are More Likely to Hold