Class session #17, Thursday November 5, 2009: Does money grow on trees?

Did I already ask that question?  Well, it matters again.  Today's class will look at another type of option -- real options -- and show why they are important.  These real options are really choices that can make a big difference to a decision, such as, can I abandon and walk away with a small loss, or can I double up and create a bigger gain.  This flexibility will be modeled through what are known as "decision trees." 

 Word to the wise: come to class only having read this chapter two times!  I know I say that all the time, but I think it's important here.