Valuation of Guaranteed Maximum Price Contracts in Korea Using the Collar Option Model

<table class="table-group" id="tab6"><tr><td><table class="table"><tr><td class="thead-hr" colspan="2"><hr/></td></tr><tr class="thead"><td class="align_left">Category</td><td class="align_center">Estimated value</td></tr><tr><td class="thead-hr" colspan="2"><hr/></td></tr><tr><td class="align_left">Value of guarantee</td><td class="align_center">$579,289</td></tr><tr><td class="align_left">Value of profit option</td><td class="align_center">$3,032,565</td></tr><tr><td class="align_left">Profit sharing ratio</td><td class="align_center">19.1%</td></tr><tr class="table-tr"><td colspan="2"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

Advances in Civil Engineering

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Table 6

Table 6: Valuation of Guaranteed Maximum Price Contracts in Korea Using the Collar Option Model 