This project proposes the use of weather derivatives, a type of financial instrument with a payout based on weather conditions, as a method for Russian farmers to hedge against daily temperature fluctuations. We created a weather derivative simulation tool in Microsoft Excel that calculates the effect of temperature on crop yield and then analyzes how the return of weather derivatives can potentially compensate for crop loss. Based on this tool, we developed a series of recommendations to help implement this system of protection with real users.

• This report represents the work of one or more WPI undergraduate students submitted to the faculty as evidence of completion of a degree requirement. WPI routinely publishes these reports on its website without editorial or peer review.

Creator

• Carkin, Eric William
• Trier, Marshall
• Johnston, Caroline Margaret
• Li, Congshan

Subject

• Sustainability
• Security
• Industry
• Computing

Publisher

• Worcester Polytechnic Institute

Identifier

• E-project-101017-093738

Keyword

• Financial services industry
• Farm management
• Risk management

Advisor

• Nikitina, Svetlana

Year

• 2017

Center

• Moscow, Russia Project Center - IQP

Sponsor

• The Financial University
• Ilyinsky, Alexander

Date created

• 2017-10-10

Resource type

• Interactive Qualifying Project

Rights statement

• In Copyright