### Applied Mathematics Seminar

Department of Mathematics, University of Texas at Arlington

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__Date/Time/Room:__ Thursday (10/19/2000) at 3:30 pm in 487 Pickard Hall
(Refreshments served at 3:00 pm)

__Speaker:__
J. David Diltz,
Department of Finance and
Real Estate,
University of Texas at Arlington

*``Real Options: Capital Investment Decisions Utilizing
the Mathematics of Derivative Securities''*

**Abstract:**
How does the financial analyst value a capital investment project when
circumstances are such that static net present value analysis is clearly
inappropriate? More and more, academics and practitioners are discovering that
capital investment projects may be analyzed as options, much like the put and
call options written on financial assets that are traded on organized
exchanges. We'll discuss the intuition and mathematics behind some simple
real option models. We'll also discuss the differences between financial
derivatives and real options that present some unique challenges for applied
mathematicians and business analysts alike.