If a gold mine allows the investor the option to dig later, what must happen for the option to be exercised? A.Gold prices must be high relative to possible future prices. B.The present value of oil must be higher than the future value of oil. C.Interest rates must increase. D.The probability of oil prices increasing must be less than the probability of oil prices decreasing.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
9. If a gold mine allows the investor the option to dig later, what must happen for the option to be exercised?
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