I have a question regarding real options – I watched your lectures, read the study text, yet I still have a problem with identyfing Pa and Pe. Is there any way I could simply extract those figures from the question? Maybe an explanation “for dummies” 🙂
My second question is about bonds, yield curves and margins. In such questions, if we are told that bonds are for 5 yrs, should we take the value from the chart in 5th year and the margin (different for different ratings – AA, AAA etc) in 5th year or should we use different value from chart and margin from the table for each year?