English to Lithuanian Bus/Financial Finance (general)

Taxonomy based on valuation approach

Borison (2005) proposed a classification of real options based on their underlying valuation approach:

1. The Classic Approach (No arbitrage, no market data): this approach represents the direct application of classic option pricing from from finance theory to non-financial or real investments, based on the existence of traded replicating portfolio and building on data drawn from that portfolio to develop option values.