What is the buy option?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk
Section: Chapter Questions
Problem 14MC: What is a real option? What are some types of real options?
Question

What is the buy option?

Expert Solution
Step 1

A buy option involves two types which are :

  • Buy call option
  • Buy put option
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