The Theory of Real Option Pricing Model in the Application of Risk Investment Decisions

With the rapid development of financial markets, the options have been widely accepted by investors. The risk investment project of high-tech companies has become the focus of the market. Compared with the traditional net present value evaluation model, the real option pricing model for risk investment includes the option's mixed characteristics ( time and abandon), considering the uncertainty and irreversibility of investment, according to its pricing theory model for making risk investment decisions. But the development of the real option is not mature, in the actual cases, there are still some limitations and problems. This paper introduces the commonly used real option pricing model ( Black-Scholes pricing model and Binary Tree Option pricing model), and points out the problems in application.