Which of the Following Is a Common Use of Weather

question 7

Multiple Choice

Which of the following is a common use of weather derivatives?

• A) Hedge the volume of electricity that will be demanded by customers in the summer
• B) Hedge the price of oil that must be purchased in the winter
• C) Hedge the price of electricity that must be purchased in the summer
• D) Hedge the price and volume of gas that must be purchased for heating in the winter

---

Definitions:

Management Processes

The series of ongoing actions and tasks undertaken by an organization's management to plan, organize, lead, and control operations.

Performance Metrics

Quantitative measures used to gauge an organization's or individual's performance, often in comparison to a standard or benchmark.

Benchmarking

The practice of comparing business processes and performance metrics to industry bests or best practices from other companies to improve performance.

Best Practices

Established methods or techniques that have been proven to lead to superior results and are used as benchmarks.