Each of the following is considered a limitation of the real options model of investment valuation except:

  • A The model is based on cash flow projections, rather than any intangibles
  • B Cumulative volatility adds an explicit incorporation of uncertainty into the model
  • C The risk exposures are increased relative to other valuation models
  • D The complexity of the model may act as a deterrent to IT managers from using it

The correct answer is C. The risk exposures are increased relative to other valuation models

No explanation given
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