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7. For the exotic derivatives assigned according to your team number below, perform a research with focus on the following items and then provide
7. For the exotic derivatives assigned according to your team number below, perform a research with focus on the following items and then provide a summary: a) How is the payoff computed and under what scenarios would you be profitable buying it? b) Which pricing models would you use to price them? c) Who would be interested in trading the assigned derivative contract? d) Would you want to trade the assigned derivative security and why? Team 1&2: Asian Option Team 5&6: Total Return Swap Team 9&10: Weather Derivative Team 13&14: Variance Swap Team 3&4: Barrier Option Team 7&8: Mortgage-Backed Security (MBS). Team 11&12: Interest Rate Swaption
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