Basic black scholes option pricing theory and applications to trading. Real options valuation also often termed real options analysis rov or roa applies option valuation techniques to capital budgeting decisions a real option itself is the right but not the obligation to undertake certain business initiatives such as deferring abandoning expanding staging or contracting a capital investment project. 1 interest rate derivatives an introduction to the pricing of caps and floors abukar m ali and mohamoud b dualeh wwwyieldcurvecom 2003 wwwyieldcurvecom 2003. An asset pricing model based on the idea that an assets returns can be predicted using the relationship between that same asset and many common risk factors created in 1976 by stephen ross this theory predicts a relationship between the returns of a portfolio and the returns of a single asset through a linear combination of many independent . Note the greeks represent the consensus of the marketplace as to how the option will react to changes in certain variables associated with the pricing of an option contract
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