Question 2
Using real options in a risk environment can be beneficial ifthe enterprise need to make decisions on switching or acquiringmultiple suppliers. Ericsson and Nokia had different approaches inmanaging risk, which led to different outcomes during a businessinterruption event at a major supplier.
a. Explain the difference between risk and uncertainty.
b. Explain how real options how can be used to inform decisionsto reduce the impact of exogenous shocks on the enterprise.
