Question

Which of the following best describes valuing land as a "real option"?
(A) The land value reflects the fact that the developer can wait to decide whether to construct a building on the site
(B) The seller provides the investor with an option to purchase the land at a specific price before a certain date
(C) The land is valued at its most probable use
(D) The seller has an option to repurchase the land from the buyer before construction takes place

Answer

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