Why is the price of electricity more volatile

Assignment Help Business Law and Ethics

Reference no: EM131241274

1. Why is the price of electricity more volatile than that of other energy sources?

2. Why is the historical data approach appropriate for pricing a weather derivatives contract and a CAT bond?

3.‘‘HDD and CDD can be regarded as payoffs from options on temperature.'' Explain this statement.

Reference no: EM131241274

Questions Cloud

What is meant by hdd and cdd : What is meant by HDD and CDD? - How is a typical natural gas forward contract structured? - Distinguish between the historical data and the risk-neutral approach to valuing a derivative.

What is the net force on the 105-kg block : The frictional force exerted by the floor on the 105-kg box is 35 N and the frictional force exerted by the floor on the 40-kg box is 20 N. In this problem, orient your axes such that the right direction is positive and the left direction is negat..

Conduct the same amount of heat : It takest1= 11.8-s to conductQ= 32.8-J of heat across the rod. How much time would it take to conduct the same amount of heat if half the length of the rod were replaced with a material with conductivity κ2=n·κ1, wheren= 4.2?

What is the payoff from a call option on the cumulative cdd : What is the payoff from a call option on the cumulative CDD during July with a strike of 250 and a payment rate of $5,000 per degree-day?

Why is the price of electricity more volatile : Why is the price of electricity more volatile than that of other energy sources? - Why is the historical data approach appropriate for pricing a weather derivatives contract and a CAT bond?

What is the period of the asteroid''s orbit about the sun : An "astronomical unit" (AU) is equal to the Earth's semimajor axis in its orbit around the Sun, or 1.50 x 10 11 m. An asteroid is discovered which has a semimajor axis of 5.6 AU. What is the period of the asteroid's orbit about the Sun?

Analyze various elements of film : You will be analyzing a movie selected from the AFI's 10 Top 10 list. The film you choose can be one that you have previously analyzed in this course. While you are allowed to choose a film that does not come from the AFI lists, you are strongly e..

Explain analyses you carry out to value a forward contract : Suppose that you have 50 years of temperature data at your disposal. Explain carefully the analyses you would carry out to value a forward contract on the cumulative CDD for a particular month.

Compression length will the scale read zero : At what compression length will the scale read zero? Express your answer to two significant figures and include the appropriate units.

User Account

All Pages