Quiz Ch 22 – T/F Real Options Valuation and the Limitation of Risk-Neutral Method

Principles of Corporate Finance

Brealey, Myers, and Allen

13th Edition

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True or false: The risk-neutral method is unsuitable for valuing real options because real assets lack a liquid market with readily observable prices and immediate exploitation of arbitrage opportunities.

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  • Search Terms: ⊚ true ⊚ false a and arbitrage are assets be cannot do exploited immediately. in liquid market method not observable opportunities options prices readily real risk-neutral since the trade using valued where
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