Excellence in
Management
Education

Title
MBA 2011 Real Options Analysis
Contacts hour per week
2.0
Lecturer
Spinler, Stefan
Language
Content
1. The Net Present Value approach to valuation, basic Real Options valuation
2. Real Options: Binomial Lattices
3. Real Options: The option to switch and interaction of multiple options
4. Real Options: Rainbow options; combining real options and Monte Carlo simulation
5. Real Options: Applications in R&D Project Management
6. Further applications of real options; risk management via capacity options
Teaching methods
lectures, case studies, group work
Literature
F.K. Crundwell: Finance for Engineers, Springer 2008
A. Dixit and R. Pindyck: The Options Approach to Capital Investment Harvard Business Review, May - June 1995
A. Buller: Oil and gas technologies, 2009
McCormack and Sick: Valuing PUD reserves: a practical application of real options techniques, 2001
R. Aboulafia: Commercial Jetliners - History and Forecast, 2010
R. Henke: Aircraft, 2009
A. Huchzermeier, C. Loch: Project management under risk: using the real options approach to evaluate flexibility in R&D, Management Science, vol. 47
Spinler, Huchzermeier: Cpacity Options: Convergence of Supply Chain Management and Financial Asset Management in: M. Frenkel, U. Hommel, M. Rudolf (Hrsg.): Risk Management: Challenge and Opportunity (2nd Edition), Spinger
Method of examination
10 % Class participation
60 % Case assignments
30 % Real Options application project