Trade tariffs and option valuations (real and binomial)

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April 16, 2025

by a professional from University of Pennsylvania - The Wharton School in Sydney NSW, Australia

I am very interested to know whether we can use real options in quantifying risk (any applicable risk) as far as it is derived from the trade tariffs. For example if I am making a decision to invest in a mine using real options and the trade tariff environment is currently in play, how would this impact my decision had there not been such a situation and could i quantify the differential risk as due to the tariff environment?
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