Utility companies often face a decision to build new plants that burn coal, oil, or both. If
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Utility companies often face a decision to build new plants that burn coal, oil, or both. If the prices of both coal and gas are highly volatile, how valuable is the decision to build a plant that can burn either coal or oil? What happens to the value of this option as the correlation between coal and oil prices increases?
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As the volatility increases the value of an option increases As the volatili...View the full answer
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Related Book For 
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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