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College students are familiar with the real option of being able to drop a course before the end of the term. The text provided a list of factors affecting the value of any option (value of underlying opportunity, variation in

College students are familiar with the real option of being able to drop a course before the end of the term. The text provided a list of factors affecting the value of any option (value of underlying opportunity, variation in the situation, duration, price). What is meant by each one of these factors in the context of the decision to drop a course? How do the factors affect the value of this option? Given that options are valuable, how would you explain why some colleges put certain limits on the ability of students to drop courses?

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Real options are those which do not involve financial transactions Following factors influence the r…View the full answer


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Intermediate Microeconomics and Its Application

Intermediate Microeconomics and Its Application

ISBN: 978-1133189039

12th edition

Authors: Walter Nicholson, Christopher M. Snyder

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Posted Date: October 07, 2016 11:49:45
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