A Pragmatic Guide to Real Options by T. Arnold

By T. Arnold

Aimed at practitioners with no earlier services within the subject, this book helps readers build easy genuine concepts versions to help in decision-making. Providing a pragmatic and informative procedure, the authors introduce uncomplicated chance theories, before placing those theories right into a real-world context.

Show description

Read or Download A Pragmatic Guide to Real Options PDF

Similar risk management books

Explosion Hazards in the Process Industries

Explosions within the procedure industries injure or kill thousands, if no longer millions, of staff each year. They take place in procedure vegetation, refineries, structures, and pipelines worldwide. hundreds of thousands of bucks are spent repairing damages, exchanging gear and rebuilding amenities within the wake of this destruction.

Handbook of Fire and Explosion Protection Engineering Principles, Third Edition: for Oil, Gas, Chemical and Related Facilities

Written through an engineer for engineers, this ebook is either education guide and on-going reference, bringing jointly all of the various aspects of the advanced tactics that needs to be in position to reduce the chance to humans, plant and the surroundings from fires, explosions, vapour releases and oil spills. absolutely compliant with foreign regulatory specifications, rather compact yet finished in its insurance, engineers, defense execs and anxious corporation administration will purchase this e-book to capitalize at the author's life-long expertise.

Security De-Engineering: Solving the Problems in Information Risk Management

As hacker agencies surpass drug cartels when it comes to profit new release, it's transparent that the great men are doing anything incorrect in details security. Providing an easy foundational treatment for our safeguard ills, protection De-Engineering: fixing the issues in details hazard administration is a definitive consultant to the present difficulties impacting company details chance administration.

Market Timing and Moving Averages: An Empirical Analysis of Performance in Asset Allocation

There's a triumphing view between researchers and practitioners that irregular risk-adjusted returns are an anomaly of monetary industry inefficiency. This outlook is deceptive, seeing that such returns in basic terms make clear the imperfect types everyday to degree and benchmark funding functionality. specifically, utilizing static asset pricing types to pass judgement on the functionality of a dynamic funding method ends up in improper inferences while predicting industry symptoms.

Additional resources for A Pragmatic Guide to Real Options

Example text

However, trying to describe a decision point as a specific type of option is really not necessary. Understanding when there is a crucial decision point and what factors should be considered in making the decision is more important than labeling the decision as this “type” of option. Consequently, as option terminology is being introduced, it will be put in the context of a traded financial option and within the context of a real option. An option is “exercised” if the option is being implemented.

The equivalence of these two portfolios is commonly called put-call parity: Premium of a call option with a strike price of X and maturity of M plus Bond price of a bond that pays X at a maturity of M equals Premium of a put option with a strike price of X and maturity of M plus Price of one unit of the underlying asset Frequently, when one option is priced, let it be a European style call option with a strike price of X, the price of the other corresponding option of the same maturity, a European put option with a strike price of X, is found through put-call parity rather than being calculated through the probability distribution of the put option’s Option Terminology and Binomial Trees 51 possible future values at maturity.

Portfolio Two is also equal to X because the put option is exercised allowing the holder to sell the share of stock in the portfolio for a price of X. Because both portfolios have the same future payoff, both portfolios have the same current value (any number of financial options textbooks like Hull (2012) demonstrate this proof). The equivalence of these two portfolios is commonly called put-call parity: Premium of a call option with a strike price of X and maturity of M plus Bond price of a bond that pays X at a maturity of M equals Premium of a put option with a strike price of X and maturity of M plus Price of one unit of the underlying asset Frequently, when one option is priced, let it be a European style call option with a strike price of X, the price of the other corresponding option of the same maturity, a European put option with a strike price of X, is found through put-call parity rather than being calculated through the probability distribution of the put option’s Option Terminology and Binomial Trees 51 possible future values at maturity.

Download PDF sample

Rated 4.70 of 5 – based on 37 votes