154-0509/01 – Real Options Application (AROe)

Gurantor departmentDepartment of FinanceCredits3
Subject guarantordoc. Ing. Miroslav Čulík, Ph.D.Subject version guarantordoc. Ing. Miroslav Čulík, Ph.D.
Study levelundergraduate or graduateRequirementChoice-compulsory
Year2Semesterwinter
Study languageEnglish
Year of introduction2010/2011Year of cancellation2016/2017
Intended for the facultiesEKFIntended for study typesFollow-up Master
Instruction secured by
LoginNameTuitorTeacher giving lectures
CUL33 doc. Ing. Miroslav Čulík, Ph.D.
Extent of instruction for forms of study
Form of studyWay of compl.Extent
Full-time Examination 2+0

Subject aims expressed by acquired skills and competences

Aim of the course is to teach students to employ real option methodology in selected areas of financial decision-making. Course will enables the students: - to apply new approach for problem solutions of valuation and decisio-making, - to evaluate and compare its advantages in comparison to traditional methods, - to propose optimal decisions for a firm under the risk.

Teaching methods

Lectures

Summary

Real options is a flexible approach for decision making about real assets, where assets are valued by using financial option pricing models. The main idea relies on the possibilities to make future decisions with option characteristics and can be exercised under pre specified conditions. It is necessary to identify these options, value them and comprise them into firm decision process.

Compulsory literature:

DiLELLIO, James: Real Option Modeling and Valuation: A Decision Analysis Approach Using DPL and Excel. London: ‎ Independently published, 2022. 136 pp. ISBN 978-1521238592. MUN, Jonathan: Real Options Analysis: Tools and Techniques for Valuing Strategic Investments and Decisions with Integrated Risk Management and Advanced Quantitative Decision Analytics. London: ROV Press, 2019. 695 pp. ISBN 978-1734497359. MUN, Jonathan: Applied Analytical - Applied Project Management: Applying Monte Carlo Risk Simulation, Strategic Real Options, Stochastic Forecasting, Portfolio management, Project Management.‎ ‎New York: IIPER Press, 2020. 143 pp. ISBN 978-1734481150.

Recommended literature:

ACKSON, Liam, et al. Applied Analytical - Oil and Gas Decommissioning Risk Management: Applying Monte Carlo Risk Simulation, Strategic Real Options, Stochastic Analytics. London: IIPER Press, 2020. 266 pp. ISBN 978-1734481174. LARRABEE, T. a J. VOSS. Valuation Techniques: Discounted Cash Flow, Earnings Quality, Measures of Value Added, and Real Options. New York: Wiley, 2022. 624 pp. ISBN 978-1118397435. SCHONE, M. Real Options Valuation: The Importance of Stochastic Process Choice in Commodity Price Modelling. Berlin: Springer, 2022. 118 pp. ISBN 978-3658074920.

Way of continuous check of knowledge in the course of semester

E-learning

Other requirements

There are no other requirements on the students.

Prerequisities

Subject codeAbbreviationTitleRequirement
154-0525 FM Financial models Compulsory

Co-requisities

Subject has no co-requisities.

Subject syllabus:

1. Introduction 2. Traditional approaches used in capital budgeting 3. Options valuation 4. Real options - fundamentals 5. Real options - classification 6. Real options – other application possibilities 7. Real options – other application possibilities (continues) 8. Real options – continuous model application 9. Real options – firm valuation 10. Real options – simulation approach application 11. Real options – simulation approach application (continues) 12. Real options – simulation approach application (continues) 13. Students examination

Conditions for subject completion

Full-time form (validity from: 2010/2011 Winter semester, validity until: 2016/2017 Summer semester)
Task nameType of taskMax. number of points
(act. for subtasks)		Min. number of pointsMax. počet pokusů
Examination Examination 100  51 3
Mandatory attendence participation:

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Conditions for subject completion and attendance at the exercises within ISP:

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Occurrence in study plans

Academic yearProgrammeBranch/spec.Spec.ZaměřeníFormStudy language Tut. centreYearWSType of duty
2015/2016 (N6202) Economic Policy and Administration (6202T010) Finance P English Ostrava 2 Choice-compulsory study plan
2010/2011 (N6202) Economic Policy and Administration (6202T010) Finance (01) Finance P Czech Ostrava 2 Choice-compulsory study plan

Occurrence in special blocks

Block nameAcademic yearForm of studyStudy language YearWSType of blockBlock owner

Assessment of instruction

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