Weather Risk and Financial Markets

Catalog description

This course will introduce the role that weather plays as a source of financial and operational risk for businesses, market and other institutions. METEO 460 Weather Risk and Financial Markets (3)The course introduces students to the role that weather plays as a source of financial and operational risk for business, markets, and other institutions. It also introduces the tools and concepts for weather risk management-the insurance products, financial instruments, and decision tools that organizations use to manage, reduce, and transfer their weather-related risks. Major topics include: (i) The concept of risk and the role of weather as a driver of economic risk; (ii) Probabilistic approaches to weather forecasting; (iii) Techniques for valuation of weather derivatives; (iv) Links between weather and markets for energy and agricultural commodities; and (v) Management of catastrophic hurricane risks. Weekly assignments culminate in a major student project on weather risk management.