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  6. BU5556: Real Options And Decision Making

BU5556: REAL OPTIONS AND DECISION MAKING (2023-2024)

Last modified: 25 Oct 2023 14:46


Course Overview

The goal of this course is to deepen and broaden students' understanding and develop their analytical skills regarding investment decisions under uncertainty and the value of flexibility and information. The course will introduce relevant concepts from economics and finance such as decision trees, the Black-Scholes equation and the binomial option pricing model and discuss how these concepts may be applied to assess investments with applications related to the energy industry such as the development of an oil lease.

Course Details

Study Type Postgraduate Level 5
Term Second Term Credit Points 15 credits (7.5 ECTS credits)
Campus Aberdeen Sustained Study No
Co-ordinators
  • Dr Juergen Bracht

What courses & programmes must have been taken before this course?

  • Any Postgraduate Programme (Studied)
  • One of MRes Applied Economics or MSc Applied Economics or Msc In Energy, Economics And Law (September Start) or MSc Applied Economics (Health) or () or Master Of Science In International Finance or Master Of Science In International Finance (Includes Cfa Exam) or Master Of Laws In Energy, Economics And Law (September Start) or Master Of Science In Financial Mathematics

What other courses must be taken with this course?

None.

What courses cannot be taken with this course?

None.

Are there a limited number of places available?

No

Course Description

The course will introduce concepts from economics and finance related to investment under uncertainty and consider some of the methods that have been developed in these fields, such as the Black-Scholes equation and binomial option pricing model. The course will also review examples that show how methods originally developed to assess financial investments can be adapted to evaluate investments in real assets, such as machinery or oil leases. Examples of the types of investment decision that may be considered in this course include: (1) the option to defer an investment such as the development of a leased tract which may contain oil; (2) the conduct of a research programme for producing information such as a programme of exploration for oil; and (3) the option to abandon or suspend a project.


Contact Teaching Time

Information on contact teaching time is available from the course guide.

Teaching Breakdown

More Information about Week Numbers


Details, including assessments, may be subject to change until 30 August 2024 for 1st term courses and 20 December 2024 for 2nd term courses.

Summative Assessments

2 x Quantitative Problem Sets

Assessment Type Summative Weighting 60
Assessment Weeks Feedback Weeks

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Learning Outcomes
Knowledge LevelThinking SkillOutcome
Sorry, we don't have this information available just now. Please check the course guide on MyAberdeen or with the Course Coordinator

Essay

Assessment Type Summative Weighting 40
Assessment Weeks Feedback Weeks

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Feedback Word Count 2000
Learning Outcomes
Knowledge LevelThinking SkillOutcome
Sorry, we don't have this information available just now. Please check the course guide on MyAberdeen or with the Course Coordinator

Formative Assessment

There are no assessments for this course.

Course Learning Outcomes

Knowledge LevelThinking SkillOutcome
FactualRememberILO’s for this course are available in the course guide.
 

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