Which of the following is true of the Brennan-Schwartz method for valuing mines?
A) It requires the observation of the market price of an option to purchase the mineral being mined.
B) The inputs used in the valuation are the current market price of the mineral,the historical price of the mineral,and the risk-free rate of interest.
C) The inputs used in the valuation are the current market price of the mineral,the historical price of the mineral,and the market risk premium.
D) It assumes that the future price movements of the underlying asset follow a binomial process.
Correct Answer:
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