The real options approach to valuation - Haskayne School of Business
The real options approach to valuation - Haskayne School of Business
The real options approach to valuation - Haskayne School of Business
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Real Op*ons Valua*on (2) • Risk neutral distribu*on can be obtained from futures prices or other traded assets – Copper mine, oil deposits • Challenges – Future prices are available only for short *me periods: in Copper up <strong>to</strong> 5 years – Copper mines can last 50 years! • <strong>The</strong> models fit prices and dynamics very well for maturi*es <strong>of</strong> available futures prices