The real option approach for estimation of venture project efficiency and risk

A K Kerimov; Керимов Александр Керимович; V M Matushok; Матюшок Владимир Михайлович; S A Balashova; Балашова Светлана Алексеевна

The real option approach for estimation of venture project efficiency and risk

Authors: Kerimov AK¹, Matushok VM¹, Balashova SA¹
Affiliations:
1. Peoples' Friendship University of Russia
Issue: No 3 (2011)
Pages: 55-62
Section: ARTICLES
URL: https://journals.rudn.ru/economics/article/view/12219
ID: 12219

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Abstract

The real option approach for estimation of venture project efficiency and risk is under consideration. The possibility of such approach is based on analogy between the project and call-option. The problem of option efficiency and risk is solved for the case of probabilistic uncertainty. Exact definitions of option parameters analogs for venture projects are given. Obtained results makes possible to estimate project efficiency and risk with taking into account intermediate results of a project.