Failure: convince the supervisor in importance of internal development of econometric model
Excess: development of the internal assessment system and models that became a basis for cooperation with internal and external partners Less
You have a gold mine as an asset. It costs $2000/ounce to pull gold out of the ground and gold currently sells at $1500/ounce . There are no other costs involved with the mine. The only choice available to you is whether or not to pull gold out of the ground or to leave it in the ground.
What is the value of the mine to you? And how do you model the value of the mine?
Some amount > $0 . You model it as a free option, as you can keep the gold in the ground until the marginal selling price of gold is > $2000.
Since your carrying costs are $0, you have an unlimited time horizon to wait for that price to ever go about $2k. Less