Start learning →

Which option is equivalent to a call option on extra capacity?

AOption to expand
BOption to abandon
COption to contract
DOutput mix option
Answer & Solution
Correct answer: A. Option to expand
Building excess capacity lets management scale up if conditions turn out favourable, like exercising a call.
Practise this question with Quill — CA Final →

Keep practising Derivatives Analysis and Valuation

Browse all Derivatives Analysis and Valuation questions for CA Final, or explore more Strategicfinancialmanagement topics.

Start a Derivatives Analysis and Valuation lesson →
Related questions