although the subject of a lease contract is the benefits of property, according to the gradual essence of the benefits, the delivery is also possible in a gradual manner after coming into existence. therefore, the delivery of the benefits is under the general rule of delivery. this means that the loss and defect after the delivery is not considered as loss and defect after the handing in of and...

This paper investigates the decision of an automaker concerning the alternative promotion of a hybrid vehicle (HV) and a full electric vehicle (EV). We evaluate the HV project by considering the option to change promotion from the HV to the EV in the future. The results not only extend previous findings concerning American options on multiple assets, but also include several new implications. O...

by approval of building advance-sale act in 2010, it is permitted to sell in advance the buildings to be built in future. in this act, certain rights and obligations are provided for the advance-sellers and advance-buyers. the approval of the said act is a development in the law of sale of buildings. amongst them are the requirement for official registration of any building advance-sale, statut...

Abstract In this study, we develop and empirically test a valuation model for commonly encountered option in office leases: tenant’s to renew at future market rent (a fair value) with lease termination as the maturity date. The integrates decision analysis real options risk private risks. “Option value” is defined value of either party pre-contract, while “option price” assumes agreement betwee...

The variational inequality formulation provides a mechanism to determine both the option value and the early exercise curve implicitly [17]. Standard finite difference approximation typically leads to linear complementarity problems with tridiagonal coefficient matrices. The second order upwind finite difference formulation gives rise to finite dimensional linear complementarity problems with n...

This paper analyzes a dynamic moral-hazard model where a principal searches for an opportunity of uncertain return, and hires an agent to evaluate potential options that arrive stochastically over time. The agent’s effort affects the informativeness of a signal about an option’s return. Based on the information provided by the agent, the principal decides whether or not to exercise an option at...

It is well-known that prices of options on one underlying asset decay with time and are convex in the underlying asset if the contract function is convex. Here, options on several underlying assets are studied and we prove that if the volatility matrix is independent of time, then the option prices decay with time if the contract function is convex. However, the option prices are no longer nece...

This paper reviews the basic properties of American options and the difficulties of applying Monte Carlo valuation to American options. Asymptotic results by Keller and co-workers are described for the singularity in the early exercise boundary for time t near the final time T . Recent progress on application of Monte Carlo to American options is described including the following: Branching pro...