What does the mean reversion of asset price have to do with options pricing? We have explored this topic previously for financial options. However, the mean-reverting property of an asset affects not only the values of financial options but also real options. A real option is the right – but …

Profitability and growth are two essential factors for companies. Several factors determine whether they will achieve this. Usually, the decisions that management makes can impact those factors significantly. The decision-making process must ensure that the company benefits from the underlying choice. During this process, real options can be crucial. What …

Decision-making is crucial to the long-term success of companies and businesses. Usually, these decisions fall under the responsibility and authority of managers. Through the right choices, companies can grow significantly. However, a wrong decision can also hinder progress substantially. The concept of real options also applies to the decision-making process. …

Options are financial instruments that derive their value from underlying securities such as stocks, bonds, etc. These are common in options contracts which offer buyers the opportunity to buy or sell the underlying asset in the future. However, it does not oblige them to do so. Instead, they get the …