Valuing the Option to Purchase an Asset at a Proportional Discount: A Correction

F. Navas, Javier

Publication:
Valuing the Option to Purchase an Asset at a Proportional Discount: A Correction

dc.contributor.author	F. Navas, Javier
dc.date.accessioned	2024-09-11T11:44:21Z
dc.date.available	2024-09-11T11:44:21Z
dc.date.issued	2009-05-01
dc.description.abstract	Gu (2002) introduces proportional-strike options to study a residential real estate program in China. Under this program, a state employee can buy her house at a fraction of the market price. The employee can also qualify for a subsidized mortgage. Given that the homeowner has the option, but not the obligation, of taking the subsidy, we show that the solution of the housing problem derived by Gu can be wrong. We provide a numerical example to illustrate the point.
dc.description.sponsorship	Departamento de Economía Financiera y Contabilidad
dc.identifier.citation	The Quarterly Review of Economics and Finance, Volume 49, Issue 2, Pages 720-724 (2009)
dc.identifier.doi	10.1016/j.qref.2007.10.002
dc.identifier.uri	https://hdl.handle.net/10433/21684
dc.language.iso	en
dc.publisher	Elsevier
dc.rights	Attribution-NonCommercial-NoDerivatives 4.0 International	en
dc.rights.accessRights	open access
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subject	Option pricing
dc.subject	Proportional-strike options
dc.subject	Employee compensation package
dc.title	Valuing the Option to Purchase an Asset at a Proportional Discount: A Correction
dc.type	journal article
dc.type.hasVersion	AM
dspace.entity.type	Publication
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relation.isAuthorOfPublication.latestForDiscovery	8b3329ec-f336-4095-8d5f-68fe7420e546