Question

Which of the following is NOT a real option?a. The option to buy shares of stock if its price goes up.b. The option to expand into a new geographic region.c. The option to abandon a project.d. The option to switch the type of fuel used in an industrial furnace.e

Answer 1

Answer: A. The option to buy shares of stock if its price goes up.

Explanation: Among the above options the less real option is " to buy shares of stock if its price goes up". It is advisable by brokers to buy shares of stock when the prices are down and sell when the prices are up in order to make profit.

The other options are more real, because expansion of a business in a new geographic region will yield more profits. Abandoning a failed business project is advisable and switching from one type of fuel to another is done based on preference and cost.