Modeling Drought Option Contracts

<table class="table-group" id="tab3"><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">0.1963</td><td align="center">0.1927</td><td align="center">0.1686</td><td align="center">0.1505</td></tr><tr><td align="left">Index Value—Ext. Val. Distribution</td><td align="center">0.1928</td><td align="center">0.1897</td><td align="center">0.1647</td><td align="center">0.1522</td></tr><tr><td align="left">Stochastic Simulation</td><td align="center">0.1616</td><td align="center">0.1676</td><td align="center">0.1520</td><td align="center">0.1447</td></tr><tr class="table-tr"><td colspan="5"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

Option price comparison for months 4–6.

International Scholarly Research Notices

tab3

Table 3

Table 3: Modeling Drought Option Contracts 