1. What is meant by HDD and CDD?
2. How is a typical natural gas forward contract structured?
3. Distinguish between the historical data and the risk-neutral approach to valuing a derivative. Under what circumstance do they give the same answer.
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1. What is meant by HDD and CDD?
2. How is a typical natural gas forward contract structured?
3. Distinguish between the historical data and the risk-neutral approach to valuing a derivative. Under what circumstance do they give the same answer.