FIN: What are some of the weather-related risks that the following sectors face
FIN: What are some of the weather-related risks that the following sectors face
Subject: Business / Finance
Question
What are some of the weather-related risks that the following sectors face: retail, agriculture, insurance, transport and energy? Can you think of any other sectors of the economy where businesses may be impacted by the weather?
explain why weather derivatives may still be accurately described as a ‘niche market’.
What is the major obstacle preventing broader adoption of the product as a risk management tool? • Below is a list of July average temperatures. Work out the h DD value and determine the value of the contract at the end of the month.
Average temperature in ° C for each July day: 10.52, 12.47, 11.72, 11.27, 11.07, 8.32, 4.47, 6.52, 4.07, 5.47, 8.17, 9.27, 7.12, 6.47, 8.42, 9.87, 11.07, 11.77, 13.57, 9.27, 7.12, 6.47, 8.42, 8.87, 10.07, 10.77, 12.57, 8.87, 10.07, 10.77, 12.57. • Use the data above to answer this question. If a trader had expected warmer than usual July weather and entered a short position in 100 h DD futures contracts at the beginning of July at an index value of 186, what is the net value of the position at the end of July.
