Viewing strategy as a portfolio of options rather than a portfolio of investments,relies upon the rationale that:
A)Uncertainty means that flexibility is valuable
B)Committing to a long-term program of investment can be disastrous if circumstances change
C)Most investment projects can be divided into a sequence of stages where,at any point of time,it is only necessary to decide the next stage
D)All of the above

Question

Quizplus · Accepted Answer

All of the options listed are valid reasons for looking at strategy as a portfolio of options rather than a portfolio of investments. Uncertainty makes flexibility valuable because it allows for adaptation to changing circumstances. Committing to a long-term investment program can be risky because unforeseen events may require a change in direction. Dividing investment projects into stages allows for incremental decision-making and the ability to reevaluate and adjust the strategy as needed.

Viewing Strategy as a Portfolio of Options Rather Than a Portfolio