The law of marginal diminishing returns:

[Answer to ques. #1]  A

[Answer to ques. #2]  Real options are often unique to particular projects, and their strike prices are not always easy to uncover. It gives the holder the right to postpone an investment on the basis of a net present value calculation. The value of the real option varies with the underlying conditions as discussed below.
a) Greater range of outcomes - the greater the range of uncertainty that can be resolved, the higher the value of an option to delay.
b) Higher interest rate - Assume that interest will be 15 percent rather than 10 percent over the future. A higher interest rate indicates a stronger preference for a given payment in the near future relative to the distant future, and the present value of the income stream discounted at 15 percent is less than that of the same stream discounted at 10 percent.
c) Longer delay in resolving uncertainty - The option value model tells us the maximum premium you should pay for the right to resolve the uncertainty in one year rather than two.

[Answer to ques. #3]  D

[Answer to ques. #4]  Real options have numerous applications. For example, a project whose size can be scaled up or down after construction may be worth more than one that you cannot alter. Oil in a storage tank and oil underground both have option values because you have a choice of when to use or extract them.The right to prepay a home mortgage has option value. A plant that can be cheaply shut down for short periods can be worth more than one that must run continuously. High stock prices of new biotechnology firms may reflect the relative ease with which they can undertake and abandon research programs, compared with established pharmaceutical producers that operate on larger scales. Going beyond markets, you might decide whether to file a lawsuit by treating it as an investment and seeing if the expected present value of your winnings is worth the cost. The right to settle or abandon the suit as information develops over the course of the case adds option value to it.53 On a more somber note, there is an option value to flexibility in choosing the time to start a war and in making decisions to continue or abandon it.

[Answer to ques. #5]  B

[Answer to ques. #6]  Real options involve decisions that are irreversible once they have been made. Generalizations
of present value calculations can determine the value of postponing such irreversible decisions.

[Answer to ques. #7]  C

[Answer to ques. #8]  Let C be the value of a call option, with
S = current price of the underlying stock
K = the strike price
ln = natural logarithm to base e
r = interest rate
T = time to expiration
 = standard deviation of returns on underlying stock
N1(d1) and N2(d2) = cumulative standard normal distribution functions.
Then,
C = SN(d1) - Ke-rTN(d2),
With
d1 = ln(S/K) + (R + 22  T and d2 = d1 - T

All of these are right, thanks!