03422nam 2200673 a 450 991046400770332120181012003909.01-4623-9718-21-4527-9450-21-4518-6868-597866128403951-282-84039-8(CKB)3170000000054987(EBL)1607696(SSID)ssj0000940806(PQKBManifestationID)11499077(PQKBTitleCode)TC0000940806(PQKBWorkID)10955753(PQKB)11011623(OCoLC)535146970(MiAaPQ)EBC1607696(EXLCZ)99317000000005498720090811d2008 uy 0engur|n|---|||||txtccrFinancial instruments to hedge commodity price risk for developing countries[electronic resource] /prepared by Yinqiu Lu and Salih NeftciWashington, D.C. International Monetary Fund, Monetary and Capital Markets Dept.20081 online resource (22 p.)IMF working paper ;WP/08/6"January 2008."1-4519-1321-4 Includes bibliographical references (p. 19-20).Contents; I. Introduction; II. Smooth fluctuations in Commodity Revenue Collections-Option Transactions; A. Plain Vanilla Options; Figures; 1. A Put Option Structure; B. Risk Reversals; Tables; 1. Prices of ATM Options; 2. Prices of 20 Percent OTM Options; 2. A Zero Premium Risk Reversal Structure; C. Barrier Option Structures; 3. Prices of the Up-and-Out Put Options: H=120; 3. A Knock-out Option; III. Smooth Borrowing Cost-A Structured Product; A. The Instrument; B. Intermediary; 4. The Structure of the New Instrument; C. Pricing; 5 The Involvement of Investment Bank as an IntermediaryMany developing economies are heavily exposed to commodity markets, leaving them vulnerable to the vagaries of international commodity prices. This paper examines the use of commodity options-including plain vanilla, risk reversal, and barrier options-to hedge such risk. It then proposes the use of a new structured product-a sovereign Eurobond with an embedded option on a specific commodity price. By extracting commodity price risk out of the bond, such an instrument insulates the bond default risk from commodity price movements, allowing it to be marketed at a lower credit spread. The productIMF working paper ;WP/08/6.PricesDeveloping countriesCommercial productsEconomic aspectsDeveloping countriesRevenueDeveloping countriesOptions (Finance)Developing countriesDeveloping countriesEconomic policyDeveloping countriesEconomic conditionsElectronic books.PricesCommercial productsEconomic aspectsRevenueOptions (Finance)Lu Yinqiu933134Neftci Salih N66419International Monetary Fund.Monetary and Capital Markets Dept.MiAaPQMiAaPQMiAaPQBOOK9910464007703321Financial instruments to hedge commodity price risk for developing countries2100263UNINA