The Use of The Black-Scholes Model In The Field Of Weather Derivatives

The Black-Scholes model is a renowned pricing method for European options. Weather derivatives are a financial product at the convergence of the insurance and stock markets that are at the present of a high level of interest. This product can hedge and be a profitable investment at the same time, and can be used on its own or as part of a portfolio. In this paper we wish to analyze if and how the Black-Scholes model applies to Weather derivatives (c) 2012 Published by Elsevier Ltd. Selection and/or peer review under responsibility of Emerging Markets Queries in Finance and Business local organization