Modeling Drought Option Contracts

<table class="table-group" id="tab2"><tr><td><table class="table"><tr><td class="thead-hr" colspan="5"><hr/></td></tr><tr class="thead"><td align="left"></td><td align="center">1951–2006</td><td align="center">1967–2006</td><td align="center">1977–2006</td><td align="center">1987–2006</td></tr><tr><td class="thead-hr" colspan="5"><hr/></td></tr><tr><td align="left"> Historical Burn Analysis</td><td align="center">0.1872</td><td align="center">0.1877</td><td align="center">0.1797</td><td align="center">0.1453</td></tr><tr><td align="left">Index Value—Ext. Val. Distribution</td><td align="center">0.1897</td><td align="center">0.1931</td><td align="center">0.1843</td><td align="center">0.1535</td></tr><tr><td align="left">Stochastic Simulation</td><td align="center">0.1846</td><td align="center">0.1988</td><td align="center">0.1873</td><td align="center">0.1584</td></tr><tr class="table-tr"><td colspan="5"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

Option price comparison for months 4–8.

International Scholarly Research Notices

tab2

Table 2

Table 2: Modeling Drought Option Contracts 