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Real Options
Erwin van der Koogh @evanderkoogh Bankwest
Real Options Erwin van der Koogh @evanderkoogh Bankwest Audience - - PowerPoint PPT Presentation
Real Options Erwin van der Koogh @evanderkoogh Bankwest Audience - - PowerPoint PPT Presentation
Real Options Erwin van der Koogh @evanderkoogh Bankwest Audience Participation Ellsberg Paradox 79% of respondents preferred the 50:50 option Wrong Right Uncertain Right Wrong Uncertain Uncertainty is an uncomfortable position. But
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Ellsberg Paradox
79% of respondents preferred the 50:50 option
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Right Uncertain Wrong
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Right Uncertain Wrong
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– Voltaire, human extraordinaire
“Uncertainty is an uncomfortable position. But certainty is an absurd one.”
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Who? Why? How? What?
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WHEN?!
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–Wikipedia, Source of All Truth
“An option is a contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on
- r before a specified date.”
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Audience Participation
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–Wikipedia, Source of All Truth
“An option is a contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on
- r before a specified date.”
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Real Options
- Options have value
- Options expire
- Never commit early unless you
know why
(And often a cost)
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Dependency Hell
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Set Based Design
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Iterations
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Sunk Cost Fallacy
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Slack (Staff Liquidity)
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Right Uncertain Wrong
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Real Options
- Options have value
- Options expire
- Never commit early unless you
know why
(And often a cost)
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