If a gold mine allows the investor the option to dig later, what must happen for...
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If a gold mine allows the investor the option to dig later, what must happen for the option to be exercised? The probability of oil prices increasing must be less than the probability of oil prices decreasing. Gold prices must be high relative to possible future prices. The present value of oil must be higher than the future value of oil. Interest rates must increase. If a gold mine allows the investor the option to dig later, what must happen for the option to be exercised? The probability of oil prices increasing must be less than the probability of oil prices decreasing. Gold prices must be high relative to possible future prices. The present value of oil must be higher than the future value of oil. Interest rates must increase.
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