Practicing Real Options Valuation: A 2-Day Hands-on Seminar is designed to introduce analysts and managers to the concepts and methods necessary to identify and value flexibilities in decisions-real options. The course is designed as an intensive interactive workshop. Throughout the course, several examples will be presented as class exercises to solidify understanding of concepts and techniques. Course attendees will use ROAT 2.1 (The Real Options Analysis Toolkit, developed by Decisioneering, Inc.) and EC RISK templates to value many real options.

Materials presented during Day 2 build upon those presented during Day 1. Therefore, registrations are accepted for both days only.

Day 1: Practicing Real Options Valuation: An Introduction

1. Understanding and Identifying Flexibilities in Decisions
   a) Real Options: What are they? Why are they important?
   b) Identifying real options and their key components through examples
2. Using Monte Carlo Simulation to Value Components of Real Options
   a) Valuing the project without flexibility: The important starting point
   b) Calculating annualized volatility-the dominant driver in real options value
   c) Valuing a real option using Monte Carlo simulation - a simple example
3. Valuing Simple Real Options
   a) Introducing alternative numerical approaches using templates and ROAT 2.1
   b) Applying alternative approaches and comparing the results
4. Identifying Fundamental Components of Real Options: Identifying and Valuing the Underlying Asset
   a) Defining the underlying asset
   b) Using Monte Carlo simulation to value the underlying asset

Day 2: Practicing Real Options Valuation: Examples and Case Study

1. Estimating the Volatiliy of the Underlying Asset
   a) Re-visiting the approach to estimation of annualized volatility
   
2. Using ROAT 2.1 and Templates to Value Real Options
   a) Learning by doing: Working through examples
   
3. Case Study
   a) A step-by-step approach to valuing the real option in the case study.
4. Evaluating More Complex Real Options Using ROAT 2.1 and Templates
5. E. Summary and Synthesis
   a) Summarizing the step-by-step approach
   b) Solidying our understanding by working through one final example.

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