Page 166 - AFM Integrated Workbook STUDENT S18-J19
P. 166
Chapter 8
3.3 Using the BSOP model to value real options
The BSOP model is well suited to simple real options i.e. those with a single source
of uncertainty and a single decision date.
In the AFM syllabus, calculations will be restricted to options to delay and expand
(call options) and options to withdraw (put options).
Calculations relating to options to redeploy are not examinable.
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