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Author Question: Five Below Zero is a new ski resort in Colorado. Five Below Zero is concerned that an abnormally ... (Read 82 times)

Lobcity

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on: Jul 11, 2018
Five Below Zero is a new ski resort in Colorado. Five Below Zero is concerned that an abnormally warm winter will prevent the accumulation of snow needed to have a profitable ski season.
 
  Five Below Zero purchased a contract that will pay a lump sum if the daily high temperature exceeds 30 degrees for more than 12 days between January 1st and March 31st. The contract Five Below Zero purchased is called a(n)
  A) catastrophe bond.
  B) weather option.
  C) interest rate swap.
  D) convertible bond.

Question 2

Which statement is (are) true concerning catastrophe models? I. Businesses other than insurance companies use catastrophe models. II. Catastrophe models are able to precisely predict disaster occurrences and loss values.
 
  A) I only
  B) II only
  C) both I and II
  D) neither I nor II


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Jossy

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Reply #1 on: Jul 11, 2018
Answer to Question 1

Answer: B

Answer to Question 2

Answer: A


Lobcity

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Reply 2 on: Jul 11, 2018
Thanks for the timely response, appreciate it

Joy Chen

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Reply 3 on: Yesterday
Excellent

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