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Weather Derivatives
Essay specific features
Written by:
Rene P
Date added:
October 28, 2015
Level:
University
Grade:
A
No of pages / words:
4 / 1079
Was viewed:
7689 times
Rating of current essay:
Essay content:
They have volume or quantity as base and are not perfectly correlated with the losses experienced. Weather derivatives are developed to manage weather risks and form one of the fastest growing derivative markets. This is a convergence of the insurance and the financial market. This article aims to provide an overview of weather risks, weather derivatives, weather derivative market and optimal weather hedging with the consideration of basis risk (The risk created by the by the fact that the from the financial derivative is a function of weather pre-specified geographical which may not be identical to the location of the firm) and credit risks (The risk that the counterparty to the derivative contract may not perform)...
displayed 300 characters
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This article aims to provide an overview of weather risks, weather derivatives, weather derivative market and optimal weather hedging with the consideration of basis risk (The risk created by the by the fact that the from the financial derivative is a function of weather pre-specified geographical which may not be identical to the location of the firm) and credit risks (The risk that the counterparty to the derivative contract may not perform)...
displayed 300 characters
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