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Study on Amortization Time and Rationality in Real Estate Investment

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E-business Technology and Strategy (CETS 2010)

Part of the book series: Communications in Computer and Information Science ((CCIS,volume 113))

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Abstract

Amortization time and rationality has been discussed a lot in real estate investment research. As the price of real estate is driven by Geometric Brown Motion (GBM), whether the mortgagors should amortize in advance has become a key issue in amortization time research. This paper presents a new method to solve the problem by using the optimal stopping time theory and option pricing theory models. We discuss the option value in amortizing decision based on this model. A simulation method is used to test this method.

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Author information

Authors and Affiliations

  1. College of Civil Engineering, Hebei University of Engineering, Handan, 056038, China

    Yancang Li, Shujing Zhou & Juanjuan Suo

Authors
  1. Yancang Li
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  2. Shujing Zhou
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  3. Juanjuan Suo
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Editor information

Editors and Affiliations

  1. Queen’s University, 99 University Avenue, K7L 3N6, Kingston, Ontario, Canada

    Marzia Zaman

  2. Royal Military College of Canada, 13 General Crerar Cres, K7K 7B4, Kingston, ON, Canada

    Yawei Liang

  3. Université du Québec en Outaouais, 283 boul. Alexandre-Taché, C.P. 1250, J8X 3X7, Gatineau, Québec, Canada

    Sohail M Siddiqui

  4. CeBA Canada, 1107-2720 Queensview Drive, K2B 1A5, Ottawa, ON, Canada

    Tim Wang

  5. Sprott School of Business, Carleton University, 1125 Colonel By Drive, K1S 5B6, Ottawa, Ontario, Canada

    Vincent Liu

  6. University of Toronto, 172 St. George Street, M5R 0A3, Toronto, Canada

    Ceecee Lu

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© 2010 Springer-Verlag Berlin Heidelberg

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Li, Y., Zhou, S., Suo, J. (2010). Study on Amortization Time and Rationality in Real Estate Investment. In: Zaman, M., Liang, Y., Siddiqui, S.M., Wang, T., Liu, V., Lu, C. (eds) E-business Technology and Strategy. CETS 2010. Communications in Computer and Information Science, vol 113. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-16397-5_6

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  • DOI: https://doi.org/10.1007/978-3-642-16397-5_6

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-16396-8

  • Online ISBN: 978-3-642-16397-5

  • eBook Packages: Computer ScienceComputer Science (R0)

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