In this course, we’ll look at the elemental features of basic call and put options and identify the factors which are the key determinants of option values. We’ll also look at the characteristics and methodology used to estimate option values: Black-Scholes and binomial option pricing models. In this course, we’ll also define the term “real option” and draw decision trees to represent alternative decisions and potential outcomes in an uncertain economy and describe three types of real options—timing, growth, and abandonment—and explain why it is important to consider those options when evaluating projects. We’ll explain how an investment for which a negative NPV is projected can have a positive NPV once any embedded real options are properly included in the evaluation as well as describe other methodologies businesses sometimes use to decide among investment projects: Equivalent Annual Benefit, Profitability Index and Hurdle Rate. We’ll wrap up the course with a look at the option equivalents of corporate securities and explain how any insights obtained can be used in determining optimal investing or issuance strategies. This course is part 4 of the New York Institute of Finance’s Corporate Finance & Valuation Methods Professional Certificate.
An excellent online course offered by edX: how it works
edX courses consist of weekly learning sequences. Each learning sequence is composed of short videos interspersed with interactive learning exercises, where students can immediately practise the concepts from the videos. The courses often include tutorial videos that are similar to small on-campus discussion groups, an online textbook, and an online discussion forum where students can post and review questions and comments to each other and teaching assistants. Where applicable, online laboratories are incorporated into the course.
edX offers certificates of successful completion and some courses are credit-eligible. Whether or not a college or university offers credit for an online course is within the sole discretion of the school. edX offers a variety of ways to take courses, including verified courses where students have the option to audit the course (no cost) or to work toward an edX Verified Certificate (fees vary by course). edX also offers XSeries Certificates for completion of a bundled set of two to seven verified courses in a single subject (cost varies depending on the courses).
An edX learning programme under Other Experiences
