Behavioural Finance and Real Option Assignment Example | Topics and Well Written Essays - 3000 words

Behavioural Finance and Real Option - Assignment Example For instance, investing in a specific project, downsizing, and expansion or disposing of other projects. Others may include licensing, R&D and M&A. Real options differ from financial options in that financial options cover short maturities that usually expire in many months. On the other hand, real options contain longer maturity that expires in many years with some specific options having expiring dates that are not finite. The assets contained in financial options are the stock prices compared to business variables that are in real options. Such variables include market demand, cash flow and commodity prices. Hence, in the application of real options to analyze physical assets, there should be carefulness in choosing an underlying variable. The reason behind this is that volatility measures employed in the model relate to an underlying variable. In financial option, as a result of inside trade regulations, these holders’ option cannot influence stock price to their benefit. However, real options’ decisions increase the real options of the project value as there are strategic options that can be made by management . Real options have more value compared to financial options. Financial options for many years have been traded but real options just emerged recently more so in the market. The two options can be arrived at using same approaches inclusive of finite differences, differential equations, simulations and binomial lattices. The` reason is that binomial lattices can be easily explained and taken in by managers of a firm as the method is easily understood. Lastly, financial options base their facts on securities traded in markets and asset prices enabling them to be objective. At Real options, in contrast, are based on assets that are not traded in the market and seldom, there are proxies that are financially traded. Therefore, management assumptions are vital in  real options valuing and not important in financial option valuing. Given a specific project, the management is in a position to strategize which will help them in future.  

Human Memory Essay Example | Topics and Well Written Essays - 1000 words

Human Memory - Essay Example e details of a story that had occurred a long time ago, the flow of complicated phrases of long songs, and many other such features, is because of memory. This occurs as a process of information retention in which one’s experiences are archived, and these can be recovered when recalled. Memory and learning are mutually and closely interrelated. Learning is the acquisition of new knowledge and skills, and memory is the retention of this knowledge. Ability to consider the past, think in the present, and predict the future, as well as the use of language are all based on learning and human memory. Memory is also understood as a comprehensive term ranging from memories of childhood and autobiographical memory, to the stream of facts recalled as a result of a trigger. It includes the memory for faces, both familiar and those that require concentration to recognise. â€Å"The memories for taste and smell, sounds and shapes as well as the feel of things are directly related to the senses†, and can trigger off a flood of nostalgia (Samuel, 1999: 49). 1) Information flows through the brain: Sensory iinformation is stored in the sensory store in the cortex. Then some of the information is quickly transferred before it is lost, into the short-term store, and then the rehearsal buffer, and finally into long-term memory storage in the sensory cortex, state Loftus and Loftus (1976). The Papez circuit travels from the hippocampus, around the limbic system and cortex, back to the hippocampus. The strengthened memory paths become a part of long-term memory (Squire, 1991). 2) How neuron networks store and retrieve memories: Neuron networks such as the Papez circuit entrenches temporary connections between visual, hearing and limbic neurons to form a new lasting memory. A network in the cortex that contains a particular sensation forms a path defined by its synapses. This is the firing path for nerve impulses that stores and invokes the particular sensation to evoke a related