Real options are options that

A. apply only to projects that are classified as high risk.
B. apply only to projects involving vacant land.
C. rarely are used in actual practice.
D. describe actions that can be taken once a project has commenced.
E. are guaranteed to increase a project’s value if implemented within the first year of the project

Option D. Describe actions that can be taken once a project has commenced.

Explanation:

The real options are real life options available that doesn't requires any piece of paper like options, swaps, futures or forward contracts to help mitigate the risk or avail future opportunities depending upon the speculation.

In simple words, its not associated with only high risk project and vacant land. So the option A and B are incorrect.

Furthermore, it is widely used because it is the real option which includes proceeding with the projects, abandoning projects, waiting for project return phase, etc. So option C is also incorrect.

The Option E says that the real options always increases the project value, which is again incorrect because future is uncertain and uncertain things might affect the business severely. This means option E is incorrect.

The last option D says that when we start executing the plan, we have many real options which will tackle emerging issues which we haven't accounted for in our planning. These right course of actions are called real option execution or real actions which is true.

the earnings of a typical investor is around $1,000,000 to $10,000,000

hope this !

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