Which of the following is a characteristic of a real option?
a. The call option on a stock exercised if some average of the prices of its components passes a critical level.
b. The right to postpone construction on the basis of net present value calculation.
c. The put option on a stock that need to be paid for (at a predetermined price) if they are actually exercised.
d. The right to sell an option at the strike price.
QUESTION 2Economies of scale are followed by diseconomies of scale.
Indicate whether the statement is true or false
QUESTION 3Women in the workplace seem to be narrowing the wage gap with males. What might be the cause of this shift during the past 25 years?
QUESTION 4Which of the following options can be exercised upon expiration at a price equal to the average price of the underlying over its life span?
a. Average options
b. Lookback options
c. Barrier options
d. Basket options
QUESTION 5If long-run average costs are falling, then the firm is experiencing diseconomies of scale.
Indicate whether the statement is true or false
QUESTION 6Is wage discrimination more likely or less likely in competitive markets?
QUESTION 7According to the Black-Scholes formula:
a. the value of an in-the-money option will equal the difference between the stock's current price and the strike price.
b. the payoff from an average option is either a multiple or a power of the difference between the strike price and the price they are exercised at.
c. the holder of a basket option has the right to buy or sell the underlying at the highest price it has attained over the life of the option.
d. the price of a call or put option varies with the price of the underlying asset.
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