Hull: Fundamentals of Futures and Options Markets, Ninth Edition
Chapter 24: Weather, Energy, and Insurance Derivatives
Multiple Choice Test Bank
1. On a certain day the highest temperature is 77 degrees and the lowest temperature is 61
degrees. What is the day’s HDD?
A. 5
B. 12
C. 4
D. 0
2. On a certain day the highest temperature is 77 degrees and the lowest temperature is 61
degrees. What is the day’s CDD?
A. 5
B. 12
C. 4
D. 0
3. Which of the following are products refined from crude oil?
A. Heating oil
B. Gasoline
C. Kerosene
D. All of the above
4. Which of the following typically has the highest volatility?
A. Crude oil
B. Natural gas
C. Electricity
D. Sometimes crude oil and sometimes natural gas
