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Certificate price of Option Pricing

Author: WangJin
Tutor: TianXinMin
School: Capital University of Economics
Course: Quantitative Economics
Keywords: Option Pricing Real Options Certificate Golf club
CLC: F224
Type: Master's thesis
Year: 2007
Downloads: 36
Quote: 0
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Abstract

In real life, we often have to face the certificate problems. In order to reduce processing costs arising from asymmetric information, we need certificate to those who need the information signal. The qualifications of legalization and standardization of identification, has become a qualification certificate. The so-called qualification, usually refers to social status, experience, etc., which engage in certain activities should have the condition, identity and so on. We are in an era of information technology, a large number of standardized certificate for our products in the convenience, but also confronts us with proof of eligibility to become a \We do not know a specific certificate can bring us much benefit, is not to go to have it, do not know when to have a certificate for the gifted, most of the time had no idea how to sell and rent already have qualifications card. However, with the accelerated process of China's modernization, with the international standards process, soil qualifications, foreign qualification certificate innovation has been blowing up. For example, in 2006 alone, the Ministry of Labor and Social Security promulgated the 113 national occupational standards (most of which formed a standardized qualification). Given the current lack of a clear certificate option pricing theory, this real options method constructs a price evaluation model. First analyzes the characteristics of the participating certificate option financial options and general real options distinction. Then, starting from its properties to golf club membership, for example, the use of decomposition discussed the value of the underlying assets to determine the problem. On this basis, qualification certificate deduced pricing formula, calculate the numerical solution, and briefly discusses the nature of the formula. Finally, we Lotus Hill Golf club membership as an example of the model have been tested. Discussion on the golf membership Display: The value of golf membership to the Club membership along with an increase in the number of drop, which differs from the number of changes in supply and demand led to lower prices, but by the number of members increased the stock of the underlying cause - Member services - value has been diluted consequences. It also can be seen that the number of members the membership price is an increasing function of volatility. On Lotus Hill golf club memberships example analysis, we found that the blind expansion of membership value for membership devastating consequences, although the market will be traded on the price of membership is still not low, but has already deviated from its theoretical value, From the analysis of other relevant literature, we can believe that the current membership of the market, the bubble is quite serious. This paper takes into account such a golf club membership certificate can not be the subject of trading, as well as the number of members on membership prices, among them the introduction of the BS model, using real options approach to build a complete pricing model, and briefly give out of the derivation. I hope this idea can be applied to more general certificate pricing research.

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