4. Checkpoint Answer Key: Understanding a Drought Index

Answers

1. What is the start date of the phase 1 contract? 1-May
2. For the start date, what does the number in parentheses represent? The dekad or 10-day period in of the year in which the contract will begin
3. What is the end date of the phase 1 contract? 30-June
4. What is the trigger of the phase 1 contract (mm)? What does this mean? 13mm: This means that there will only be a payout if rainfall is less than 13mm
5. What is the exit of the phase 1 contract (mm)? What does this mean? 7mm: This means that if there is less than 7mm of rainfall, there will be a full payout.
6. If the total rainfall during the contract window is 10mm, will there be a payout? If Yes, would this be a partial or full payout? Yes (partial payout)
7. What is the maximum amount of rainfall that is counted for each dekad? 25mm
8. According to this example contract, how many phase 1 payouts would there have been in the last 15 years? 3
9. What years would have paid out for the 1st phase? 2000, 2004, 2009
10. Which year would have paid out the most? What percentage of maximum payout? Why does the percent of maximum payout received change for different years? 2000, 97%: The percent of maximum payout received changes for different years because the rainfall would have been at different levels between the trigger and the exit.