Contracts Derivatives

Enron Corporation was once known as Northern Natural Gas Company, Founded in 1932 in Omaha, Nebraska as a provider of natural gas. Through its early stages, Northern Natural Gas Company was unsuccessful in their business venture. They experienced problems in persuading consumers to use natural gas to heat their homes because of fear that natural gas leaks lead to explosions. Thanks to the great depression, many people were taking the risk because of how relatively cheap natural gas was. As the company’s revenues and profit grew, northern began to acquire many of its smaller competitors resulting in their apparent growth as a company. In 1947 its stock was listed on the New York stock exchange, providing the company with more finances which it needed to continue its growth in acquiring its competitors to becoming the largest natural gas supplier in the United States.

Futures are a contract or legal agreement, where an investor agrees to purchase a certain amount of a physical good or financial asset on a specific date for a set price.

The presentation was scheduled for the first week of December 1990. Mr. Pross outlined the use of various derivatives, noting that they differed widely in their ability to reduce risk. If the company was, say, placing a large bid to buy a building abroad, one might prefer to use foreign currency options to hedge the currency risk in the event the deal fell through. He argued, however, that foreign currency futures were best suited to hedge the fluctuations in revenues arising from currency movements. Mr. Pross proposed a plan to hedge currency risk using futures which

Climate change is a real issue that can lead to severe economic losses to the public and private sectors of the U.S., not mentioning human casualties. This report focuses on the general effects of the climate change in the economic sector affecting businesses specifically in the Southeastern region of the U.S. and Texas. Climate change will cost millions of dollars in labor productivity decline, energy demand will significantly increase, and the agricultural sector will suffer considerably losses.

The first driver is observed climate change impacts. In Canada, and in Ontario specifically, the ways in which the climate is changing are generally known to us. Shorter and warmer winters, earlier snow melts, increased extreme precipitation, and extreme heat events. These observed climate impacts and more frequent extreme weather events are proving to be very costly. The Insurance Bureau of Canada, for instance, reported that the value of total insurance claims related to weather events has increased 40 fold between 1983 and 2013 (Burgess, 2014). Impacts on the health and well-being of Canadians are also displayed beyond monetary costs and frequently involve displacement, injuries and loss of life (Lemmen & Warren, 2008). Without aggressive

Madeleine also asked Andy about the future of his resort business and Andy promptly answered by affirming that his businesses have embraced the Stanford meteorological findings about the increase volatility of weather. In the final analysis, Andy vouches for an adjusted mountain resort and hotel industry business model that will lead to increased use of green energy and thereafter low carbon imprint. Andy told Madeleine that his grasp of various weather aspects stems from his years working as a fire ranger in New

17) The EMV that a person is willing to give up in order to avoid the risk associated with a gamble is referred to as the ________.

Mitigation of weather related impacts are possible if the public/clients are kept informed with the most precise forecast so that the right decisions are made.

This contract can be done by buying the premium of weather insurance to cover weather risk.. Currently, UGG purchased a number of different insurance policies for various traditional risk exposures. Each policy had its own retention level and its own coverage limit. By integrating it various coverages under one policy, UGG could replace the individual deductibles and limits with an overall annual aggregate deductible and limit that would apply to all or a subset of losses, including grain volume losses.

The option contract can be a convenient solution for the buyer when the demand is difficult to predict due to market volatility. This type of contract helps the buyer to reduce the inventory risk and keep good relations with the suppliers, as they both agree to fix a price and adjust orders quantities after the demand have been determined, paying a reservation price that will be lost if the buyer decide not to exercise the option. For the supplier, sometimes can be beneficial, sometimes not, depending on the uncertainty in the demand and how much it cost for them to fulfill orders in shorter periods of time. However, as the buyer must pay a reservation price, the supplier will always be compensated by the additional revenue resultant from the option.

Growing up, the weather was always a vital part of my family’s every day life. My dad was a fish boat captain and to him the conditions outside shaped the outlook of his week. I used to sit with him on Sunday’s before he left for work and watch the radar. He taught me old fishermen’s tales like sundogs bring rain, and “red skies at night sailors delight”. These memories with my dad instilled a love and respect for weather, and led to me wanting to pursue a career in professional meteorology.

Analyze the derivatives market and determine the use of derivatives to efficiently manage investment risks in an investment portfolio.

Chief factors of Irvine’s diverse population are the city’s geographic location, weather, and both the educational levels and socioeconomic statuses of its people. Above all, most people check the weather every day, which is an influential factor related to the city’s geographic location, particularly its proximity to the Pacific Ocean. The weather is such an important, and thus monitored, factor contributing to people’s daily lives, because great weather conditions can precipitate great living conditions and, in turn, attract diverse populations. By forecasting the weather every day, the news media company can inform viewers and listeners about daily weather changes and events. As an employee of this company in Irvine, I would integrate knowledge about diverse populations in daily weather forecasting services in order to educate the company and audiences alike. In sum, Irvine’s weather is a chief factor affecting its population’s daily lives, living conditions, and quality of life.

guarantee.” In this instance, the guarantee takes the form of a European put option (called a “Right”

Hi Jeremy Bumgarner, nice to meet you my fellow classmate. There are numero.us organizations which are susceptible to weather challenges. These challenges can cause negative impacts to occur in revenue, cost and financial performance. The adverse financial impact of weather is managed through a weather risk market. A risk manager is contracted who accepts the responsibility of risks caused by effects of adverse weather. Adverse variances in weather are determined as a result of effective weather risk management. The risk response strategy for weather would be acceptance. Bad weather intervals are uncontrollable. In most situations these weather patterns can be predicted which allows for preparation of these risks. This preparation minimizes