Modeling drought option contracts (Q1954356)
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scientific article; zbMATH DE number 6172933
| Language | Label | Description | Also known as |
|---|---|---|---|
| English | Modeling drought option contracts |
scientific article; zbMATH DE number 6172933 |
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Modeling drought option contracts (English)
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11 June 2013
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Summary: We introduce a new financial weather derivative-a drought option contract-designed to protect agricultural producers from potential income loss due to agricultural drought. The contract is based on an index that reflects the severity of drought over a long period. By modeling temperature and precipitation, we price a hypothetical drought contract based on data from the Jinan climate station located in a dry region of China.
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