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Using the Theory of Option Pricing for Estimating Investment Projects in Construction


Elena Mikhaylova
(about the author)

Mikhaylova Elena Vladimirovna – Postgraduate Student, Department of Economics and Management, Volgograd Institute of Business

Published in:
Creative Economy
– № 1 / January, 2012



Keywords: call option, deployment of capital investments, economic assessment, investment project in construction, organizational and technological reliability, put option, real option


Citation:
Elena Mikhaylova (2012). Using the Theory of Option Pricing for Estimating Investment Projects in Construction. Creative Economy, 6(1), 136-142. — url: http://bgscience.ru/com/lib/3377


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Abstract:

The standard procedures of cash flow discounting do not take into account either the uncertainty of prices on the real estate market or the internal conditions of the construction process. To avoid such situation, the writer suggests that the option pricing model should be used. This model allows investors a possibility of reacting quickly to the changing market conditions in the course of the project implementation.







References:
1. Krukovskiy A.A. Model realnyh optsionov v investitsionnom analize / Trudy ISA RAN 2007. − T. 30 – C. 95–112.
2. Limitovskiy M.A. Investitsionnye proekty i realnye optsiony na razvivayuschikhsya rynkakh: ucheb.-praktich.posobie. − M.: Delo, 2004. – 528 s.
3. Matveev N.V. Metody kompleksnoy otsenki investitsionnyh proektov / avtoreferat diss. na soiskanie uchenoy stepeni kandidata ekonomicheskikh nauk: 08.00.05 − Sankt-Peterburg, 2007.
4. Mikhaylova E.V. Rost pribyli investora kak odin iz kriteriev otsenki konkurentosposobnosti stroitelnoy organizatsii // Biznes. Obrazovanie. Pravo. Vestnik Volgogradskogo instituta biznesa. – 2011. − №3(16). − S. 67−70.