Real Options as a Tool in the Decision to Relocate: An Application to the Banking Industry

Certain types of industries benefit from a large flexibility in the choice of the location of their activities. This is particularly the case for banks. In this paper we show that a bank which has the possibility to locate its activities in two countries rather than in one can increase its profits. We then demonstrate that this excess profit can be evaluated through the use of real options. We then provide an extension to the model and show that the bigger the bank, the bigger the return derived from the multiple location.

Start-ups Defined as Portfolios of Embedded Options

In this paper we show the advantages of staged investments for venture capitalists. We develop an option-pricing model that enables to evaluate the flexibility acquired by a venture capitalist when he stages his investment process. Instead of investing a fixed amount at the beginning of the investment, the venture capitalist proceeds to a staged investment (one first investment and a second investment). The second investment will be triggered by a successful achievement of the first investment. Should the first investment be unsuccessful, the second investment will not be executed. Staging the investment in two phases enables the investor to reduce its uncertainty at the beginning of the project. As it will be demonstrated in the paper, the decision to proceed to the second investment can be modelled as a portfolio of a call option and a binary option.real options, staged investments, structured products, embedded options

1. What are structured products?

The use of structured products: applications, benefits and limitations for the institutional investo

Analyzing firms' strategic investment decisions in a real options' framework

Within the context of investment under uncertainty, the real options literature has led to models that capture primarily the time to wait flexibility of monopolistic corporations' investment decision. In this paper, we propose an approach which relies on barrier options to model production and/or sales delocalization flexibility for multinational enterprises making decisions under exchange rate uncertainty. We then extend the model by introducing game theoretic considerations to show how the information set and the competitive structure of the market may lead firms to act strategically and exercise their delocalization options preemptively at an endogenously fixed exchange rate barrier

U-SBAS: A universal multi-SBAS standard to ensure compatibility, interoperability and interchangeability

Several regional augmentation GNSS systems (like SBAS) are already fully operational and other are under development with new frequencies and signals on the way. Therefore, it becomes imperative to guarantee for all GNSS users the compatibility, interoperability and interchangeability between all these systems. The goal is to ensure that the user’s multi-mode receiver can choose and mix signals from different GNSS and SBAS systems to achieve more availability, accuracy and robustness. Attaining that objective will require agreements on frequency plans and signal designs, as well as other details including means to ensure interoperability of system times and geodetic reference systems. This paper suggests a Universal-SBAS (U-SBAS) standard, compatible with all the existing and planned regional GNSS systems (and their evolutions) in the world, like IRNSS, QZSS, PCW, BEIDOU-1, WAAS, EGNOS, SDCM, GAGAN, MSAS. The proposed worldwide multimodal U-SBAS standard carries additional channels (signals and messages) to cover the nonaeronautical specific Safety-of-Life (SoL) services, and also High Precision Positioning Services (HPPS), Position Velocity Time (PVT), authentication services, safety services, scientific application services, High Precision Timing Services (HPTS), etc. U-SBAS is designed to be fully interoperable with the current SBAS standards and to allow significant performance and service improvements in operational, scientific and/or security areas. Finally usage examples of the proposed standard are given for different types of applications such as science, aviation, precise point positioning, timing, security, robust positioning, maritime and reflectometry