Subject The article addresses and substantiates the need to evaluate bank investment projects under the real options method. Objectives The main objective is to develop an optimal methodology to evaluate investment projects, which will enable to efficiently manage bank funds and earn an adequate return on investment. Methods I employed qualitative and quantitative methods, analyzed various aspects of investment project evaluation in a bank, identified the best and risk-reducing evaluation method, and its application in banks. Results The study proves the reasonability for banks to conduct investment activities, and the need to improve the methodology of investment activity evaluation within risk management. Relevance The use of real options is one of innovative approaches to asset valuation. Traditional approaches disregard competitive advantage and flexibility in management. Moreover, bank managers face uncertainty at all stages of project implementation, and this fact makes them employ more flexible tools to assess investment projects.
Keywords: investment project, evaluation, real option, banks, risk-management
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