hwaarm.blogg.se

The industry classification states that information technology is the sector where highest proportion derivative use is recorded.

Foreign currency risk is the most widely hedged risk through derivatives in Indian economy whereas the international derivative outstanding position reveals that interest rate risk holds the largest chunk of the total derivative exposures. Futures as representatives of standardised derivatives are the next best alternative of risk management tool for the Indian companies. results it can be concluded that forwards and swaps are by far the most important derivative instruments in India. The paper analyses the pattern of corporate risk management practices through financial derivatives in top Indian non-financial companies and explores different dimensions corporate use of derivatives by using an array of financial derivative contracts to hedge against a number of business risks which are responsible for non/under-performance of business objectives. For this purpose historical data (covering a period of 50 years, i.e., 1954-2003) relating to a sample of selected meteorological subdivisions of India is considered. Further, the problem of pricing monsoon derivatives is analysed. The basic MRD call and put option structures are defined. The generic formulation of monsoon options is tried by defining the underlying variable in terms of Millimeter Rainy Days (MRDs). The monsoon options could serve as special purpose vehicles facilitating transfer of systemic monsoon risk to capital markets. In this paper an attempt has been made to develop a conceptual framework for securitising monsoon risk via monsoon options. The possibility of engaging capital markets for absorbing the systemic monsoon risk needs to be explored. Relief packaging, the traditional tool of handling monsoon disasters, proved to be inadequate and ineffective.

Insurance markets are not developed to absorb the monsoon shocks.

Amberite nature of monsoons is a major source of risk adversely impacting the Indian economy.