Real Options in Theory and Practice: For Instructors

REAL OPTIONS
in THEORY and PRACTICE

For Instructors

Real Options in Theory and Practice can be used as a textbook in many
different ways. Depending on the aims of the course, the underlying theory
(Chapters 2-5) can be covered in more or less detail. Similarly, it is not
necessary to cover all the material in Chapters 6-11: once students are
shown two or three examples from Chapters 7 and 8 they should be able to
navigate their way through the rest of that part of the book. The selection of
material on calibration (Chapters 12-14) can be made based on the case
studies to be included. Suggestions for three different types of courses are
given here.

Solution manual

A manual containing solutions to all of the end-of-chapter problems is
available to instructors who adopt Real Options in Theory and Practice as a
course textbook. It can be obtained by contacting the author.

Lecture slides

These password-protected PDF files cover the main contents of each chapter
and are suitable for classroom use. Instructors who wish to use these slides
in the classroom can obtain the password by contacting the author.

Chapter 2: The modeling framework
Chapter 3: Valuing Single-period Cash Flows [Sample -- no password]
Chapter 4: Valuing Multi-period Cash Flows
Chapter 5: Combining Valuation and Decision Making
Chapter 6: Options that do not Affect the State of a Project
Chapter 7: Simple Timing Options
Chapter 8: Compound Timing Options
Chapter 9: Uber-compound Timing Options
Chapter 10: Switching Options
Chapter 11: Learning Options
Chapter 12: Calibration Using Spot and Futures Price Data
Chapter 13: Calibration Using Option Price Data
Chapter 14: Calibrating Trees of Alternative State Variables
Chapter 15: Forestry Management and Valuation
Chapter 16: Developing a Gas Field
Chapter 17: Mothballing an Ethanol Plant