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Enron Corporation's Weather Derivatives ...

Bodily, Samuel E.,...

Case

Enron Corporation's Weather Derivatives (A)

Bodily, Samuel E.; Bruner, Robert F.

F-1299 | Published September 1, 2000 | 12 pages Case

Collection: Darden School of Business

Product Details

New options on weather from Enron are described, in particular floors, swaps, and caps on heating degree days. An electric utility is considering whether to purchase a weather derivative to offset the risk of low volume of kilowatt hours. After understanding the nature and purpose of the contract, students will structure the option in preparation for valuing it. A teaching note is available to registered faculty, along with a video supplement to enhance student learning.

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