The European experience with the creation of the single Market and the Maastricht Treaty has shown that political pragmatism and the adoption of transparent rules, especially in budget decisions, are means to reduce the structural gap between countries. However, the enlargement to new member...

In this paper we address the issue of quantifying the incentive to invest or disinvest from an equity investment to benefit from discrepancies between its real value and its market value. Such a situation arises in particular when a manager trades her company's own stock. Two existing models for...

This paper generalizes the result of Leland (1985) to hedging strategies that use not only the underlying but all kinds of otions. These hedging strategies are a generalization of static hedging. In addition, the result is valid for all shapes of payoff, including path-dependent. Two cases of...

This paper analyses investment decisions under uncertainty with noisy information. We provide closed-form solutions for the value of the investment policy and the optimal investment threshold. We show that when the information about the decision variable is noisy, the real option values...