Sentence examples for compound options from inspiring English sources

But it was never intended for use with more complicated derivatives, such as compound options, and attempts to use it for real-option valuation are misguided and inappropriate.

The option valuation model developed in this study extends the binomial lattice framework to model a hospital information system (HIS) investment opportunity with compound options.

Using the binomial model to value this investment project as a compound option is a two-step process.

Using a generalisation of Geske's compound option model, we derive a closed-form solution for a n-fold compound option model, and apply it to calculate the value of a NDA using sector average figures.

In valuing these compound option models, a crucial problem is how to deal with the different types of risk.

Students analyze the different deployment strategies using a binomial model compound option Excel macro, and calculate the volatility using Monte Carlo analysis in Excel.

For a NDA, the R&D phase can best be presented as a 6-fold compound option on the commercialisation phase.

It is a series of consecutive phases from R&D to commercialisation, where each phase is in fact an option on executing the following phase, i.e. a compound option.

The final step is calculating the value of the compound option at the beginning of the first year in other words, the project's current value in order to determine whether it merits the up-front investment.

The next step is to put a value on each of those intermediate real options, as well as on the total compound option of which they are a part, so that you will know whether to hold on to the option or abandon it.

Since the project involves a phased investment, it can be treated as a compound option: A $60 million investment creates the right to invest $400 million in one year, and exercise of that choice creates the right to invest $800 million to purchase a new asset, namely the plant.