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18 September, 02:01

Decision tree analysis is more commonly used in valuing securities than real assets. True or False: The preceding statement is correct. False True Which type of real option allows a project to be expanded if demand turns out to be greater than expected

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  1. 18 September, 03:17
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    FALSE - The preceeding statement is not correct that the Decision tree analysis is more commonly used in valuing securities than real assets.

    Decision tree is used in valuing real options, such as expansion options and abandonment options, as their value cannot be determined via the Black-Scholes formula. Hence the statement is not true.

    Expansion options is a type of real options that allows a project to be expanded if demand turns out to be greater than expected.
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