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Our founder and CEO is a world-renown expert in the fields of real options analysis, options valuation, and simulation applications, and has written numerous articles and books on related subjects. Below are a sample of his books that are pertinent to the software, consulting, training, and services provided by Real Options Valuation, Inc.

Modeling Risk (Second Edition): Applying Monte Carlo Simulation, Real Options Analysis, Forecasting, and Optimization (Wiley, 2010) NEW

The book will be released May 2010. This book will use four software applications: Risk Simulator, Real Options Super Lattice Solver, Modeling Toolkit, and Employee Stock Options Valuation Toolkit. It shows how these different methodologies are used in concert with one another in a comprehensive and integrated risk analysis and risk management paradigm. This book is a completely updated version of the first edition of Modeling Risk text. The updates include several detailed new business cases and dozens of applied cases (U.S. Military strategy, Boeing's global systems of systems, biotech deal licensing, oil and gas exploration, manufacturing real estate, personal financial planning, employee stock options valuation under FAS123, and many more)!

We live in an environment fraught with risk and operate our businesses in a risky world, as higher rewards only come with risks. It is unimaginable if the element of risk is not considered when corporate strategy is framed and when tactical projects are implemented. Modeling Risk provides a novel view of evaluating business decisions, projects, and strategies by taking into consideration a unified strategic portfolio analytical process. The book provides a qualitative and quantitative description of risk, as well as introductions to the methods used in identifying, quantifying, applying, predicting, valuing, hedging, diversifying, and managing risk, through rigorous examples of the methods’ applicability in the decision-making process.

Pragmatic applications are emphasized in order to demystify the many elements inherent in risk analysis. A black box will remain a black box if no one can understand the concepts despite its power and applicability. It is only when the black box becomes transparent that analysts can understand, apply, and convince others of its results, value-add, and applicability, that the approach will receive wide-spread influence. This is done through step-by-step applications of risk analysis as well as presenting multiple business cases, and discussing real-life applications. This book is targeted at both the uninitiated professional as well as those verbose in risk analysis––there is always something for everyone. It is also applicable for use as a second-year M.B.A. level or introductory Ph.D. textbook. A DVD is included in the book, including a trial version of the Risk Simulator and Real Options SLS software, Excel models, and associated training videos.

The second edition includes additional practical case-studies, multiple hands-on detailed exercises, as well as the latest forecasting techniques, and is almost double the size of the first edition, both in terms of number of pages and analytical techniques.
 

…unavoidable for any professional…logical, concrete and conclusive approach…

Jean Louis Vaysse, Vice President of Marketing, Airbus (France)

…a “must-have, must-read” book with practical applications of risk analysis…

Glenn Kautt, President and Chairman, The Monitor Group

…clear step-by-step…latest technology in decision making for real-world business…

Dr. Paul W. Finnegan, Vice President, Alexion Pharmaceuticals

… must-read for portfolio managers...captures risk exposure of strategic investments…

Rafael E. Gutierrez, Executive Director, Seagate Technology

…clearly organized tool-supported exploration of real-life risks, options, strategy…

Robert Mack, Vice President, Distinguished Analyst, Gartner Group

…valuable tools for corporations to deliver value to shareholders and society…

Dr. Markus Götz Junginger, Lead Partner, Gallup (Germany)

… powerful toolset for program managers to make rational choices …

Rear Admiral James Greene (Ret.), NPS Acquisitions Chair

…my favorite writer…a sparkling jewel… complex concepts with lucid explanations…

Janet Tavakoli, President, Tavakoli Structured Finance

… pragmatic powerful risk techniques, valuable theoretical insights and analytics…

Dr. Robert Finocchiaro, Technical Director, 3M

…clear roadmap, breadth of topics to create dynamic risk-adjusted strategies…

Jeffrey A. Clark, Vice President Strategic Planning, The Timken Company

…the best risk modeling book is now better…required reading by all executives…

David Mercier, Vice President Corporate Development, Bonanza Creek Energy

…step-by-step complex concepts with unmatched ease and clarity…a “must read” …

Dr. Hans Weber, Product Development Leader, Syngenta AG (Switzerland)

…most important risk tools in one volume…a definitive source on risk management with vivid examples…

Dr. Ricardo Valerdi, Massachusetts Institute of Technology

…innovative approach bridging the gap between theory and practice…

Dr. Richard J. Kish, Chair and Professor of Finance, Lehigh University

…a “must have” for experience with cutting-edge, high-productivity analytical tools…

Dr. Roberto Santillan-Salgado, Professor, EGADE-ITESM, Monterrey (Mexico)

…advanced theories of mathematical statistics with practical techniques…

Dr. Takao Fujiwara, Professor, Toyohashi Univ. of Technology (Japan)

…brilliantly clear exposition of nontrivial subjects, theory and real-world practice…

Dr. Evaristo Diz, Professor. Director of Risk, Universidad Católica (Venezuela)

…absolutely the best book in risk… mere mortals can do it…useful in all industries…

Dr. Thomas Housel, Professor, U.S. Naval Postgraduate School

…conceptualizes and measures risk…great value to professionals, VCs, investors…

Dr. Charles T. Hardy, Principal, Hardy & Associates

…combines practical application with intellectual and academic rigor…

Paul Siegel, Chief Executive Officer, The Globecon Group

…the most comprehensive, understandable, practical book indispensable in valuation…a tour-de-force…

Jay B. Abrams, Author and President, Abrams Valuation Group

…helps managers make informed, disciplined, replicable, defensible choices…

CAPT Mark D. Wessman (US Navy, Ret.), President, Wessman Consultancy

…complex topics exceptionally explained…can understand and practice…

Agustín Velázquez, Senior Economist, Central Bank of Venezuela

…bridge of theory and practice, intuitive, understandable interpretations…

Luis Melo, Senior Econometrician, Central Bank of Colombia

Advanced Analytical Models:  Over 800 Models and 300 Applications from the Basel II Accord to Wall Street and Beyond (Wiley, 2008) NEW

Advanced Analytical Models is a large collection of advanced models with a multitude of industry and domain applications. The book is based on years of academic research and practical consulting experience, coupled with domain expert contributions. The Modeling Toolkit software that holds all the models, Risk Simulator risk simulation software, and Real Options SLS software were all developed by the author, with over 1,000 functions, tools, and model templates in these software applications. The trial versions are included in the accompanying DVD. The applications covered are vast. Included are Basel II banking risk requirements (credit risk, credit spreads, default risk, value at risk, etc.) and financial analysis (exotic options and valuation), risk analysis (stochastic forecasting, risk-based Monte Carlo simulation, optimization), real options analysis (strategic options and decision analysis), Six Sigma and quality initiatives, management science and statistical applications, and including everything in between, such as applied statistics, manufacturing, operations research, optimization, forecasting, and econometrics.

This book is targeted at practitioners who require the algorithms, examples, models, and insights in solving more advanced and even esoteric problems. This book does not only talk about modeling or illustrate basic concepts and examples; it comes complete with a DVD filled with sample modeling videos, case studies, and software applications to help you get started immediately. In other words, this book dispenses with all the theoretical discussions and mathematical models which are extremely hard to decipher and apply in the real business world. Instead, these theoretical models have been coded up into user-friendly and powerful software, and this book shows the reader how to start applying advanced modeling techniques almost immediately. The trial software applications allow you to access the approximately 300 model templates and 800 functions and tools, understand the concepts, and use embedded functions and algorithms in their own models. In addition, you can get run risk-based Monte Carlo simulations and advanced forecasting methods, and perform optimization on a myriad of situations as well as structure and solve customized real options and financial options problems.

Each model template that comes in the Modeling Toolkit software is described in this book. Descriptions are provided in as much detail as the applications warrant. Some of the more fundamental concepts in risk analysis and real options are covered in the author’s other books. It is suggested that these books, Modeling Toolkit: Applying Monte Carlo Simulation, Real Options Analysis, Stochastic Forecasting, and Portfolio Optimization (2006) and Real Options Analysis, Second Edition (2005), both published by John Wiley & Sons, be used as references for some of the models in this book. Those modeling issues that are, in the author’s opinion, critical, whether they are basic issues or more advanced analytical ones, are presented in detail. As software applications change continually, it is recommended that you check the author’s Web site (www.realoptionsvaluation.com) frequently for any analytical updates, software upgrades, and revised or new models.

Advanced Analytical Models contain many powerful and useful applications ranging from R&D strategy valuation and Six Sigma models to risk simulation and strategic options. A must-have book for those starting out in Excel modeling to advanced modelers. An excellent resource for those applying stochastic models for portfolio project prioritization and valuation."

-Dr. Robert Finocchiaro, Technical Director, Corporate R&D Services, The 3M Company

Dr. Johnathan Mun is one of the most gifted teachers of quantitative risk analysis in the history of global finance and business. All of his books combine science, art, intuition, creativity, and above all, they are acutely perceptive, always practical, and provide startling clarity, on the methods and pathways of proper business decision making, when faced with uncertainty. Advanced Analytical Models contains a vast treasure trove of over 800 models, unlike anything ever published in the field. Absolutely groundbreaking…The practical application of the risk models in this book, will keep the rest of us busy, for years to come.

-Brian Watt, CRM, Chief Risk Officer and Chief Financial Officer, GECC

Dr. Mun’s expertise in real options and practical modeling methodologies in real world cases is superb, and was used to value technologies in the U.S. military’s Improved Engineering Design Process. His approach quantified real net benefits when considering the knowledge reuse on an enterprise scale and his approach is the most powerful when business value is most difficult to quantify.

-Dr. Ali Farsaie, President & CEO, Spatial Integrated Systems, Inc.

"Dr. Mun's latest book is scholarly strong and practically meaningful, by successfully synthesizing all aspects of risk and analytical models and presents them in a well-integrated manner. It is a must-read for both practitioners and students in the field of risk management. The Basel II risk analysis is covered extensively through real examples. With in-depth coverage of the most important and practical models, Dr. Mun's book has set a high standard of publishing in the area of analytical models, risk and decision analysis. The book has significant practical contributions at all levels of risk management. I strongly recommend this book to all readers who want to gain a clear and applied understanding of risk and analytical models.

-Dr. Ehsan Nikbakht, CFA, FRM, PRM, Professor of Finance, Zarb School of Business, Hofstra University, New York

An outstanding collection of important analytic models that span numerous disciplines and can be used in a wide range of industries. The models and their underlying discussion are sound and can be applied as is or modified by the reader for their own applications. The well-written book together with the trial software and models are a powerful combination and provide an exceptional learning opportunity for the reader. This material should be valuable to both analysts and managers who need a sound analytical framework to help them develop and support their decisions.

-Dr. Edmund H. Conrow, CRM, PMP, Risk Management Consultant/Author

Dr. Mun has created ‘The Encyclopedia of Models’, which addresses a wide-range of cross-industry and cross-enterprise analytical challenges. The models span the spectrum – from simple techniques that one can perform in a few minutes to advanced problems that are tackled in a robust manner. Dr Mun’s new book will show you how to combine analytical methods to point at the right answers. Three words to sum it up:  Comprehensive, Lucid, and, Elegant. Every aspiring and accomplished analyst needs to have this book in their library.

-Mark A. Benyovszky, Managing Director, -Zero Delta Center for Enterprise Alignment and Zero Delta University

Risk simulation, binomial lattices, and other computational models have not been within effective reach for many in-the-trenches professionals who did not get this training years ago. Through this book, on top his other books before it, and through his software, Dr. Mun has explained the mysteries, made available the tools, and continues to publish example upon example of how these models can be applied to improve the professional work we've been doing. Once in a while, a new thought leader emerges with a train long enough for the rest of us to ride to attain a new level of professionalism – Dr. Mun is one of these.

-James F. Joyner III, CPA/ABV, CVA, CPC, AIFA, Managing Member, Integra Benefits Consulting LLC

The mechanics of risk and options analyses are simple, but successful real-life application is all about the art of framing which requires constant practice. This book is a framing-fitness work-out through an extraordinary variety of recipes. Framing is not just for modeling, without it, decision making under uncertainties is much harder than it already is. If the answer is not explicit in an example, it is likely to exist as a variant in another – reading them triggered solutions to two commodity related problems that have plagued me for some time.

-Fanton Chuck, Chief Executive Officer, Renova Energy plc

Over the years Johnathan Mun's books have become our corporate bibles with multiple copies in our library. We have recently made the big switch over to Dr. Mun's Modeling Toolkit, Risk Simulator, and Real Options SLS because we found it easier to use while still being more sophisticated and flexible for our needs. "Advanced Analytical Models" is designed to complement the software and is just packed with useful real-life models that are directly applicable to our consulting work. The small refinements such as being able to specify the random number sequence so that you actually can get the same results in a live presentation reflect his sensitivity and understanding of the consulting environment. We have found his Real Options SLS invaluable in helping hospitals understand the different phasing options available to them when contemplating seemingly unreachable $500M capital projects. Dr. Mun's genius lies in his ability to take extremely complex theory and bring it down to the level that the rest of us can understand and easily apply to our respective fields. Entertaining as always, who ever thought we would get a book on advance analytics that was actually funny! For an industry (healthcare) that increasingly has to forecast 10 and 15 years into the future while still relying on "budget period" analytics and single point estimates, Dr. Mun's book is a "light in the storm."  Numerous healthcare examples from queuing theory to methods for analyzing surgical outcomes bring serious analytics into the realm of the practical.

-Lawrence D. Pixley, FACMPE, Founding Partner, Stroudwater Associates

Modeling Risk: Applying Monte Carlo Simulation, Real Options Analysis, Forecasting, and Optimization
(Wiley, 2006) NEW

The book is now released and available on Amazon! This book will use all three software: Risk Simulator, Real Options Super Lattice Solver, and Employee Stock Options Valuation Toolkit. It shows how these different methodologies are used in concert with one another in a comprehensive and integrated risk analysis and risk management paradigm. This book is a completely updated version of the older Applied Risk Analysis text. The updates include NINE detailed new business cases and dozens of applied cases (U.S. Military strategy, Boeing's global systems of systems, biotech deal licensing, oil and gas exploration, manufacturing real estate, personal financial planning, employee stock options valuation under FAS123, and many more)!

"Every year the market of managerial books is flooded again and again. This book is different. It puts a valuable tool into the hands of corporate managers who are willing to stand up against uncertainties and risks and are determined to deliver value to shareholder and society, even in rough times. It is a book for the new generation of managers, for whom Corporate America is waiting."

–Dr. Markus Götz Junginger, Managing Partner, IBCOL Consulting AG (Switzerland)

Dr. Mun breaks through the hyperbole and presents a clear step-by-step approach revealing to readers how quantitative methods and tools can truly make a difference. In short, he teaches you what's relevant and a ‘must know.’ I highly recommend this book, especially if you want to effectively incorporate the latest technologies into your decision making process for your real world business."

–Dr. Paul W. Finnegan, MD, MBA, Vice President, Commercial Operations and Development, Alexion Pharmaceuticals, Inc.

"A must read for product portfolio managers . . . it captures the risk exposure of strategic investments, and provides management with estimates of potential outcomes and options for risk mitigation."

–Rafael Gutierrez, Exec. Director of Strategic Marketing Planning, Seagate Technology

"Johnathan Mun has previously published a number of very popular books dealing with different aspects of risk analysis-associated techniques and tools. This last publication puts all the pieces together. The book is really unavoidable for any professional who wants to address risk evaluation following a logical, concrete and conclusive approach."

–Jean Louis Vaysse, Deputy Vice President Marketing, Airbus (France)

Real Options Analysis: Tools and Techniques, 2nd Edition (Wiley, 2005)  NEW!

Real Options Analysis, 2nd edition provides a novel view of evaluating capital investment strategies by taking into consideration the strategic decision-making process. The book provides a qualitative and quantitative description of real options, the methods used in solving real options, why and when they are used, and the applicability of these methods in decision making. In addition, multiple business cases and real-life applications are discussed. This includes presenting and framing the real options problems, as well as introducing a stepwise quantitative process developed by the author for solving these problems using the different methodologies inherent in real options. Included are technical presentations of models and approaches used as well as their theoretical and mathematical justifications. The book is divided into three parts: the qualitative discussions of real options; the quantitative analysis and mathematical concepts; and practical applications. The first part looks at the qualitative nature of real options, providing actual business cases and scenarios of real options in the industry, as well as high-level explanations of how real options provide the much-needed insights in decision making. The second part of the book looks at the step-by-step quantitative analysis, complete with worked-out examples and mathematical formulae. The third part illustrates the use of the Real Options Valuation’s Super Lattice Solver software and Risk Simulator software both developed by the author and included in the enclosed CD-ROM (standard 30-day trial with extended academic license). In this section, more detailed business cases are solved using the software.

This second edition provides many updates including:

• A trial version and introduction to the Super Lattice Solver software that supersedes the author’s older Real Options Analysis Toolkit software (all bugs and computational errors have been fixed and verified).

• A trial version and introduction to the Risk Simulator software also created by the author.

• Extended examples and step-by-step computations of American, Bermudan, European, and Customized options (including abandon, barrier, chooser, contraction, expansion, and other options).

• More extensive coverage of advanced and exotic real and financial options (multiple-phased sequential compound options, complex sequential compound option, barrier options, trinomial mean-reverting options, quadranomial jump-diffusion options, pentanomial dual-asset rainbow options, multiple-asset with multiple-phased options, engineering your own exotic options, and so forth).

• Extended real options cases with step-by-step worked out solutions using the Super Lattice Solver software.

• Several brand new case studies on applying real options in the industry.

• An extended discussion on volatility estimates, risk, and uncertainty.

This book is targeted at both the uninitiated professional as well as those well-versed in real options applications. It is also applicable for use as a second-year M.B.A. level textbook or introductory Ph.D. reference book.

“…this book is a must have and must read… Dr. Mun’s new book is a refreshing, cutting-edge look at a powerful new decision-making process… it isn’t often you can truthfully say a book breaks new ground, but [this book] has certainly done that.”

-Glenn G. Kautt, President, Monitor Group, Inc. (USA)

“Many books on real options can be intimidating. Dr. Mun offers a pragmatic, reliable and entertaining guide. Complex concepts and formulas are brilliantly interspersed with well chosen examples and step-by-step walk through from a variety of industries.”

-Shota Hattori, President and CEO, Kozo Engineering, (Japan)

“Real Options Analysis is the clearest book on real options that we have read to date.  It does an excellent job of demystifying a difficult and complex subject.  It provides a solid basis for conceiving, assessing and evaluating real option investments, which will make it useful to practitioners and students alike.”

-Prof. Ian C. MacMillan, Ph.D., Professor, The Wharton School of the University of Pennsylvania (USA)

“…the clarity and comprehensive coverage makes it the best guide for all practitioners… coupled with state-of-the-art financial tools CD-ROM.”

-Michael Sim, Partner, Moores Rowland International (Hong Kong)

“Dr. Johnathan Mun certainly has earned the reputation of being an expert on the subject… consultants, analysts, decision-makers and engineers will be all over this book and its software.”

-Phyllis Koessler, Managing Director, Koessler and Associates (Switzerland)

“…finally, a real options analysis book that is technically sophisticated enough to be useful, and practically written so that it can actually be used. It is destined to become the handbook of real options.”

-Tracy Gomes, CEO, Intellectual Property Economics (USA)

“Dr. Mun demystifies real options analysis and delivers a powerful, pragmatic guide for decision-makers and practitioners alike. Finally, there is a book that equips professionals to easily recognize, value, and seize real options in the world around them.”

- Jim Schreckengast, Sr. Vice President, R&D Strategy – Gemplus International SA (France)

“...written from the viewpoint of an educator and a practitioner, his book offers a readable reference full of insightful decision-making tools to satisfy both the novice and the experienced veteran.”

-Prof. Richard Kish, Ph.D., Associate Professor of Finance, Lehigh University (USA)

“Dr. Mun has converted his tacit financial knowledge into a digestible user-friendly book. He effectively leads the reader on a solid path starting from discounted cash flow, progressing through Monte Carlo analysis and evolving to real options to get even closer to the target of achieving confident corporate decisions. His ability to clearly explain the relationships of popular competing analysis methods will make this a must have reference book for today's decision makers.”

-Prof. Ken English, Director of R&D, The Timken Company (USA)

“The book leads the field in real options analytics and is a must-read for anyone interested in performing such analyses. Dr. Mun has made a formidable subject crystal clear and exponentially easy for senior management to understand. Monte Carlo simulation and real options software alone is worth the book price many times over.”

-Morton Glantz, Renowned educator in finance, author of several books, financial advisor to government (USA)

Valuing Employee Stock Options Under 2004 FAS 123 (Wiley Finance, 2004)

The Financial Accounting Standards Board (FASB) released a Proposed Statement of Financial Accounting Standards (FAS) in 2004 that amended earlier FAS Statements 123 and 95. Soon after, the Wall Street Journal called this release "among the most far- reaching steps that the Financial Accounting Standards Board has made in its thirty-year history. " As a result, companies must learn how to rigorously and efficiently value and expense employee stock options (ESOs). Based on author Johnathan Mun’s advisory work with the FASB over 2003 and 2004, his graduate research work in the area of options analysis, and actual FAS 123 consulting projects with several Fortune 500 firms, Valuing Employee Stock Options provides you with a comprehensive understanding of the valuation applications of a customized binomial lattice through a systematic and objective assessment of the methodology.

This just-in-time resource includes informative sections that:

· Review the impact of ESO Cost
· Illustrate the issues of fair market valuation through an analytical assessment of three mainstream approaches used in option pricing
· Discuss the technical background required to run the Black-Scholes model (BSM) and customized binomial lattices
· Run through in-depth sample case studies applying FAS 123
· Provide multiple options valuation results that prove valuable from the perspective of both an analyst and a chief financial officer

The analyses performed in this book also use the author’s own proprietary customized binomial lattice computer algorithms as well as his Real Options Analysis Toolkit, and Risk Simulator simulation software. Filled with in-depth insight and expert advice, Valuing Employee Stock Options can help CFOs and finance directors as well as analysts, consultants, and accountants understand the implications and applications of valuing employee stock options in light of today’s ever-changing financial rules and regulations.

"Veritas has modeled the valuation of its employee stock options for analytical purposes using a proprietary customized binomial lattice developed by Dr. Johnathan Mun. The valuation based on the customized binomial lattice model allows us to take into account the impacts of multiple vesting periods, employee suboptimal exercise behavior, forfeiture rates, changing risk-free rates, and changing volatilities over the life of the option. . . . The customized binomial lattice model resulted in a considerably lower expense, considering the expensing guidelines included in the FAS 123."

–Don Rath, Vice President, Tax and Stock Administration, Veritas Software Corporation

"This is one of those rare books written in anticipation of a major shift in the industry and economy. FAS 123 will throw a lot of public companies into a frenzy . . . the smart ones are identifying the opportunity to master the process and take over the driver’s seat. The methodology and the tools developed by Dr. Johnathan Mun are proven, pragmatic, and offer a great deal of value and benefit to those early adopters."

–Dr. Markus Junginger, Managing Partner, IBCOL Consulting

"After extensive review of the FASB exposure draft and consideration of a variety of option valuation methodologies, E*TRADE FINANCIAL has decided to implement a binomial lattice model in Equity Edge, our stock plan management and reporting software. We found Dr. Mun’s work on employee stock option pricing very valuable."

–Naveen Agarwal, Director, Product Management, E*TRADE FINANCIAL Corporation

Applied Risk Analysis: Moving Beyond Uncertainty, 1st Edition (Wiley, 2003)

Applied Risk Analysis by Dr. Johnathan Mun (Wiley 2003), includes a CD-ROM with a series of Excel worksheet models ranging from stochastic simulations to resource optimization. The book and software are being adopted by various universities around the world in their MBA programs. Leading industries are in the process of adopting the methodologies outlined in the book and software.

"Once again, Dr. Mun has created a ‘must-have, must-read’ book for anyone interested in the practical application of risk analysis. Other books speak in academic generalities, or focus on one area of risk application. Applied Risk Analysis gets to the heart of the matter with applications for every area of risk analysis. You have a real option to buy almost any book–you should exercise your option and get this one!"

–Glenn Kautt, MBA, CFP, EA, President and Chairman, Monitor Group, Inc.

"Johnathan Mun’s book is a sparkling jewel in my finance library. Mun demonstrates a deep understanding of the underlying mathematical theory in his ability to reduce complex concepts to lucid explanations and applications. For this reason, he’s my favorite writer in this field."

–Janet Tavakoli, President, Tavakoli Structured Finance, Inc. and author of Collateralized Debt
  Obligations & Structured Finance

"Every year the market of managerial books is flooded again and again. This book is different. It puts a valuable tool into the hands of corporate managers who are willing to stand up against uncertainties and risks and are determined to deliver value to shareholder and society, even in rough times. It is a book for the new generation of managers, for whom Corporate America is waiting."

–Dr. Markus Götz Junginger, Managing Partner, IBCOL Consulting AG (Switzerland)

"Dr. Mun breaks through the hyperbole and presents a clear step-by-step approach revealing to readers how quantitative methods and tools can truly make a difference. In short, he teaches you what's relevant and a ‘must know.’ I highly recommend this book, especially if you want to effectively incorporate the latest technologies into your decision making process for your real world business."

–Dr. Paul W. Finnegan, MD, MBA, Vice President, Commercial Operations and Development, Alexion Pharmaceuticals, Inc.

"A must read for product portfolio managers . . . it captures the risk exposure of strategic investments, and provides management with estimates of potential outcomes and options for risk mitigation."

–Rafael Gutierrez, Exec. Director of Strategic Marketing Planning, Seagate Technology

"Johnathan Mun has previously published a number of very popular books dealing with different aspects of risk analysis-associated techniques and tools. This last publication puts all the pieces together. The book is really unavoidable for any professional who wants to address risk evaluation following a logical, concrete and conclusive approach."

–Jean Louis Vaysse, Deputy Vice President Marketing, Airbus (France)

Real Options Analysis Course: Business Cases (Wiley, 2002)

In his groundbreaking book Real Options Analysis, real options expert Johnathan Mun provided a qualitative and quantitative description of real options, the methods used in solving them, why and when they are used, and the applicability of these methods in the decision-making process. Now, in his latest endeavor–Real Options Analysis Course–Mun sets out to help you truly optimize the use of real options in the decision-making process, through an in-depth discussion of real-world business cases and innovative real options software applications.

Real Options Analysis Course opens with a clear introduction on how to get started with the Real Options Analysis Toolkit (limited edition) included on the companion CD-ROM. Easy-to-follow directions allow you to set up and familiarize yourself with this cutting-edge software, which features seventy different real options functions, thirty-three models, easy-to-use templates, and a powerful graphical interface.

Once you’re up and running, Real Options Analysis Course lays the groundwork for the numerous business cases that will be explored later on in the book. First, you will become familiar with the seven simple stepwise procedures used in setting up and solving a real options problem. Then you’ll receive a refresher course on the basics of financial modeling–Monte Carlo simulation and volatility estimates–as well as the basics of real options, from binomial lattices to state-pricing approaches to solving a European option.

From here, you will receive an executive education on applying real options in a dynamic business environment–through examining some of the most comprehensive series of real options business cases, their inherent problems, and their solutions, which can be solved using the software included on the companion CD-ROM. Some of the cases you will work on include:

Option to Abandon
Option to Expand
Option to Contract
Option to Choose
Compound Options
Barrier Options
Basic Black-Scholes with Dividends
Stochastic Timing Options
Switching Options

Real Options Analysis Course provides a cutting-edge view of evaluating and valuing capital investment strategies by taking into consideration the inherent real options embedded in the strategic decision-making process. Combining expert advice and in-depth business cases with innovative real options analysis software, Real Options Analysis Course will help you identify, prioritize, value, and manage strategic opportunities better than ever before.

"Dr. Mun’s latest book is a logical extension of the theory and application presented in Real Options
Analysis. More specifically, the Real Options Analysis Course presents numerous real options examples and provides the reader with step-by-step problem-solving techniques. After having read the book, readers will better understand the underlying theory and the opportunities for applying real option theory in corporate decision-making."

–Chris D. Treharne, President, Gibraltar Business Appraisals, Inc.

"This text provides an excellent follow up to Dr. Mun’s first book, Real Options Analysis. The cases in Real Options Analysis Course provide numerous examples of how the use of real options and the Real Options Analysis Toolkit software can assist in the valuation of strategic and managerial flexibility in a variety of arenas."

–Charles T. Hardy, PhD, Chief Financial Officer & Director of Business Development, Panorama Research, Inc.

"Most of us come to real options from the perspective of our own areas of expertise. Mun’s great skill with this book is in making real options analysis understandable, relevant, and immediately applicable to the field within which you are working."

–Robert Fourt, Partner, Gerald Eve (UK)

"Mun provides a practical step-by-step guide to applying simulation and real options analysis–invaluable to those of us who are no longer satisfied with conventional valuation approaches alone."

–Fred Kohli, Head of Portfolio Management, Syngenta Crop Protection Ltd. (Switzerland)

Real Options Analysis: Tools and Techniques, 1st Edition (Wiley 2002)

Real Options Analysis by Dr. Johnathan Mun (Wiley 2002), provides you with a comprehensive overview of the real options methodology and explores the tools and techniques inherent in this method that will allow you to efficiently value strategic investments and decisions. It examines both the qualitative and quantitative aspects of real options, the methods used in valuing real options, why and when they are used, as well as the applicability of these methods in decision-making. Real options expert Johnathan Mun will help you understand and implement real options analysis under a variety of circumstances and over a wide range of industries, from pharmaceutical, oil, and gas to manufacturing and technology. Mun first looks at the qualitative nature of real options and provides actual business cases and scenarios of real options in the industry, as well as high-level explanations of how real options provide much-needed insights for decision-making. He then focuses on quantitative analysis, and reveals the power of simulation and real options analysis through the book’s companion CD-ROM.

From the basics of expansion and switching options to advanced options problems such as valuing timing options calculated with stochastic optimization, Real Options Analysis is a complete and accessible guide to the uses of real options in the decision-making process. Through expert advice, in-depth case studies, mathematical formulae, real-world scenarios, real options software, and end-of-chapter questions, Real Options Analysis provides serious insights into the understanding and application of real options when valuing strategic investments and decisions.

"This book is a must-have and must-read . . . Mun’s new book is a refreshing, cutting-edge look at a powerful new decision-making process . . . it isn’t often you can truthfully say a book breaks new ground, but [this book] has certainly done that."

–Glenn G. Kautt, President, Monitor Group, Inc. (USA)

"Many books on real options can be intimidating. Mun offers a pragmatic, reliable, and entertaining guide. Complex concepts and formulas are brilliantly interspersed with well-chosen examples and step-by-step walk-throughs from a variety of industries."

–Shota Hattori, President and CEO, Kozo Keikaku Engineering, Inc. (Japan)

"The clarity and comprehensive coverage makes it one of the best guides for all practitioners . . . coupled with state-of-the-art financial tools on CD-ROM."

–Michael Sim, Partner, Moores Rowland International (Hong Kong)

"Mun certainly has earned the reputation of being an expert on the subject . . . consultants, analysts, decision-makers and engineers will be all over this book and its software."

–Phyllis Koessler, Managing Director, Koessler and Associates (Switzerland)

"Finally, a real options analysis book that is technically sophisticated enough to be useful, and practically written so that it can actually be used. It is destined to become the handbook of real options."

–A. Tracy Gomes, President, Intellectual Property Economics, LLC (USA)