Abstract :
In this paper, real options theory is utilized to evaluate the effect of uncertain
electricity and CO2 costs on speculation conduct. Methodologically, the
allegiance of the newspaper in this appreciation is that uncertainty is not just
stopped down as far as stochastic processes and their fluctuation, additionally as
far as expected and acknowledged procedures, i.e. the procedures, which are
used as a constituent of the progression system, and the processes that the
speculator really confronts when picking the choices as per his ideal
methodology. We utilize the components of portfolio theory and consolidate
them in a vintage setting, keeping in mind the end goal to conquer the lack of it
and advantage from that focal point, while as yet having the capacity to think
about element portfolios. The idea is to not just discover portfolios that augment
returns subject to a predefined level of danger or the other way around keeping in
mind the end goal to place the ideal system of innovations at a period in time, yet
to decide the ideal means of advancement of such a portfolio after some time,
given changing information costs and continuous mechanical advancement and
exposure about these processes. In other words, we locate the ideal portfolio over
advancements, as well as crosswise over time and quality.
