154-0911/02 – Real options methodology application in company´s financial decision-making (AVMRO)

Gurantor departmentDepartment of FinanceCredits10
Subject guarantordoc. Ing. Miroslav Čulík, Ph.D.Subject version guarantordoc. Ing. Miroslav Čulík, Ph.D.
Study levelpostgraduateRequirementChoice-compulsory
YearSemesterwinter + summer
Study languageCzech
Year of introduction2015/2016Year of cancellation
Intended for the facultiesEKFIntended for study typesDoctoral
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
Part-time Examination 80+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
Individual consultations

Summary

Real options is a flexible approach for decision making on 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 company decision-making process.

Compulsory literature:

DiLELLIO, James: Real Option Modeling and Valuation: A Decision Analysis Approach Using DPL and Excel. London: ‎ Independently published, 2018. 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, 2016. 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:

MUN, Jonathan: Modeling Risk: Applying Monte Carlo Risk Simulation, Strategic Real Options, Stochastic Forecasting, Portfolio Optimization, Data Analytics, Business Intelligence, and Decision Modeling. London: ROV Press; 2015. 1114 pp. ISBN 978-1734497359. SHOCKLEY, Robert. An Applied Course in Real Options Valuation. New York: South-Western College Pub, 2006. 544 pp. ISBN 978-0324259636. SMIT, John and Lenos TRIGEROGIS. Strategic Investment: Real Options and Games. New York: Princeton University Press, 2012. 504 pp. ISBN 978-1400829392.

Way of continuous check of knowledge in the course of semester

oral examination

E-learning

Other requirements

There are no other requirements on students.

Prerequisities

Subject has no prerequisities.

Co-requisities

Subject has no co-requisities.

Subject syllabus:

The objective of the course is to provide knowledge about application possibilities of advanced methods in financial decision-making of a company. The course aims at assumptions, conditions and application possibilities of real options methodology, when simultaneously risk and flexibility is considered when solving valuation and decision-making issues. Attention is paid primarily to the description of basic types of real options, their parameters and valuation procedure. Due to the specific features of real options, attention is devoted to discrete valuation models.

Conditions for subject completion

Part-time form (validity from: 2015/2016 Winter semester)
Task nameType of taskMax. number of points
(act. for subtasks)
Min. number of points
Examination Examination  
Mandatory attendence parzicipation:

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Occurrence in study plans

Academic yearProgrammeField of studySpec.ZaměřeníFormStudy language Tut. centreYearWSType of duty
2022/2023 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2021/2022 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2020/2021 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2019/2020 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2018/2019 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2017/2018 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2016/2017 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan
2015/2016 (P6202) Economic Policy and Administration (6202V010) Finance K Czech Ostrava Choice-compulsory study plan

Occurrence in special blocks

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