- BenutzernameMoneyland User Questions
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July 27, 2017, 9:48:42 AM
How do weather derivatives work? Are they a high-risk investment product?
How do weather derivatives work?
Here you will find the right answers
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- BenutzernameMoneyguru von moneyland.ch
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July 27, 2017, 1:55:22 PM
Hi there,
Weather derivatives are financial instruments the returns of which are dependent on weather. Typically weather derivatives are used to hedge investments against weather hazards. Catastrophe bonds - which pay out generous coupons but default on principal repayment if weather hazards occur during bond terms - are one example of a weather derivative.
Best regards from Moneyguru
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