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Question 3 a) Explain how contracts help to relocate, share and spread risk.(5marks) b) How can option contracts to be used for risk management? Explain

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Question 3 a) Explain how contracts help to relocate, share and spread risk.(5marks) b) How can option contracts to be used for risk management? Explain the meaning of exercise price and option fee. (5marks) c) What factors favour the exercise of market power in electricity markets? (5marks) d) What is Financial Transmission right and how they are used (5marks) Question 3 a) Explain how contracts help to relocate, share and spread risk.(5marks) b) How can option contracts to be used for risk management? Explain the meaning of exercise price and option fee. (5marks) c) What factors favour the exercise of market power in electricity markets? (5marks) d) What is Financial Transmission right and how they are used (5marks)

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