Natural Resources, Timber, and Farmland
Free CAIA Level I lesson in Real Assets. 38 min read, ~5,754 words.
Natural resource development is an exchange option, swapping stochastic input costs for stochastic output value; option value rises when costs and outputs are weakly correlated or uncorrelated. Moneyness = developed value / development cost; ITM properties develop first (low-hanging fruit), but deep ITM options should wait until time value reaches...
Read the full lesson, free →
Worked examples and practice. Free with a free account, no card.
What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- natural resources
- land
- timber
- farmland
- contagion indices
- timber farmland returns
- commodities no futures
- term structure
- rolling contracts
- backwardation contango
- commodity diversification
- expected returns
- commodity indices
- commodity returns
- commodity producers
- mlps
- infra overview
- infra classifications
- investing infra
- infra risks
- ip overview
- ip cash flows
- art
- patents
- re categories
- cre advantages
- re styles
- re office
- re industrial retail
- re multifamily
- cre debt
- cre equity leases
- mortgage underwriting
- commercial mortgages
- cre financing
- cre vehicles
- liquid cre
- re development
- cre valuation
- income approach
- public re vehicles
- reit returns
Browse all free CAIA Level I lessons or jump into free CAIA Level I practice questions.