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2013 | OriginalPaper | Chapter

7. Using Meteorological Forecasts for Improving Weather Derivative Pricing

Authors : Antonis K. Alexandridis, Achilleas D. Zapranis

Published in: Weather Derivatives

Publisher: Springer New York

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Abstract

Accurate weather forecasts can significantly improve both weather derivative pricing and weather risk management. Forecasters employ different techniques in developing weather forecasts. Common approaches include the numerical weather prediction methods, ensemble forecasts, and probabilistic forecasts. In this chapter, the most common approaches in producing meteorological forecasts are presented. Moreover, approaches for utilizing these forecasts in order to improve weather derivative pricing and weather risk management are presented.

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previous chapter Pricing Temperature Derivatives

next chapter The Effects of the Geographical and Basis Risk

http://en.wikipedia.org/wiki/Numerical_weather_prediction

http://en.wikipedia.org/wiki/Ensemble_forecasting

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Title: Using Meteorological Forecasts for Improving Weather Derivative Pricing
Authors: Antonis K. Alexandridis
Achilleas D. Zapranis
Publisher: Springer New York
Book: Weather Derivatives
Print ISBN: 978-1-4614-6070-1

Electronic ISBN: 978-1-4614-6071-8

Copyright Year: 2013
DOI: https://doi.org/10.1007/978-1-4614-6071-8_7

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