Hi Sir,
Question 4 in the Sep/Dec 2015 sample utilises a call option for deciding whether to establish the plant. In a scenario like this one, what indicates that it is a call option we are valuing?
Thanks.
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Sep/Dec 2015 Furlion Co
March/June 2016 paper Question 4 not Sep/Dec Sorry
7y ago#2It is an option to expand and is therefore a call option (see Chapter 14 of our free lecture notes, and the lectures that go with it).
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