AØKA08064U Investment Theory - cancelled 2014
Volume 2013/2014
Education
MSc in Economics
Content
Investment projects
typically consist of an initial investment and some uncertain
dividend. An example could be to build a factory and sell the
produce at an uncertain market price. In the course investment
projects are seen as flexible in the sense that investor is able to
decide when to invest rather than facing the choice between
investing now or not investing. Moreover there may be other
flexibilities in investment projects such as the possibilities to
stop the project and to expand the project. Due to the flexibility
the usual NPV rule (if the net present value is positive, then
invest) turns out to be wrong. Indeed it is necessary to take the
flexibility into account. In the course a theory, where the options
or flexibilities in investment projects are priced, is developed.
All necessary theory is introduced In the course.
Learning Outcome
After the course the
student should:
- Understand the principles of investment theory based on real options.
- Have a basic knowledge of random processes in continuous time, including Ito’s lemma.
- Master the techniques for evaluating investment projects based on real options.
- Be able to apply the theory to new investment projects with new real options.
- Understand the steps in applying (investment) theory to real life projects.
Literature
Syllabus:
A.K. Dixit og R.S. Pindyck: Investment under Uncertainty, Princeton
University press + notes + articles.
Academic qualifications
Basic knowledge of
economics and probability theory.
Teaching and learning methods
6 hours of combined lectures
and exercises every working day from the 22nd July to the 7th
August.
Workload
- Category
- Hours
- Exam
- 3
- Lectures
- 78
- Preparation
- 125
- Total
- 206
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Exam (Written)
- Credit
- 7,5 ECTS
- Type of assessment
- Written examination, 3 hours under invigilationThe exam is a 3-hours written examination with closed books.
- Aid
- Without aids
- Marking scale
- 7-point grading scale
- Censorship form
- External censorship
100 % censurship
- Exam period
- Will be updated before the start of the semester
- Re-exam
- Same as ordinary. But if only a few students have registered for the re-exam, the exam might change to an oral exams with a synopsis to be handed in. This means that the examination date also will change.
Criteria for exam assesment
The Student must in a satisfactory way demonstrate that he/she
has mastered the learning outcome of the
course.
Course information
- Language
- English
- Course code
- AØKA08064U
- Credit
- 7,5 ECTS
- Level
- Full Degree Master
- Duration
- 1 block
- Placement
- Summer
- Schedule
- Summer (week 30-32):
From Monday the 22nd July to Wednesday the 7th August. - Course capacity
- No limits
- Continuing and further education
- Price
- For price, please click here
- Study board
- Department of Economics, Study Council
Contracting department
- Department of Economics
Course responsibles
- Mich Tvede (10-75716b70367c7e6d6c6d486d6b777636737d366c73)
Saved on the
01-04-2014