Real-options

The editor of this book, Lenos Trigeorgis, earned his Ph.D. from Harvard University, and has since that published several articles in distinguished journals on one of his favourite research subjects - real options. By using basic option pricing principles in capital investments, a practicing manager as well as an academic can develop financial models that handle stochastic information, for instance oil prices. The capital investment theories explained in this book is the greatest breakthrough in capital investments since the 60's. The widely accepted DCF-method should partly be replaced by Option Pricing Models, OPM, as this is the first method that can handle volatility and uncertainty in a theoretically consistent way. Several academics are finding this difficult to accept - the old "truth" doesn't hold is a volatile environment! If you believe in Discounted Cash Flow analysis - you MUST read this book! If you want to stay ahead of your competitors, you SHOULD read THIS comprehensive book on capital investments! It may require a lot more maths that any other books on the subject, as the book is rather theoretical with several real life examples. Most of the 20 authors have a background in maths as well as economics, something preferrable but not necessary for the reader of this excellent book. The book could be recommended for MBA and PhD students. Niklas Uddstrom (niklas.uddstrom@mandatum.fi)

This book was thorough and comprehensive in its discussion of real options while remaining understandable. The real world examples, stories, and graphs helped increase my comprehension. I was most impressed by the author's detailed explanations of how options can be strategically used in corporate risk management. The chapters on valuation, modern option pricing, and capital investment decisions were excellent as well. Hands down the best book on real options that I have read.

The book leads the field in real options analytics and is a must-read for anyone interested in performing such analyses. Dr. Mun has made a formidable subject crystal clear and exponentially easy for senior management to understand. Monte Carlo simulation and Real Options software alone is worth the book price many times over. Excellent job!

Dr. Mun's cogent handbook demystifies real options analysis and delivers a powerful, pragmatic guide for decision-makers and practitioners alike. Novices will appreciate the exceptional clarity of the examples and techniques, while experienced analysts will treasure the book's depth and extensive insight into real-world applications. Everyone will love the real options software on the accompanying CD-ROM. Finally, there is a book that equips professionals to easily recognize, value, and seize real options in the world around them.

Jim Schreckengast

Senior Vice-President, R&D Strategy -- Gemplus International SA

Mun's book is an excellent guide for those who have basic knowledge about asset valuation and want to study real options.