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Explain analyses you carry out to value a forward contract

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Reference no: EM131241271

1. Suppose that you have 50 years of temperature data at your disposal. Explain carefully the analyses you would carry out to value a forward contract on the cumulative CDD for a particular month.

2. Would you expect the volatility of the 1-year forward price of oil to be greater than or less than the volatility of the spot price? Explain your answer.

Reference no: EM131241271

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