Message-ID: <2174519.1075861287008.JavaMail.evans@thyme> Date: Wed, 7 Nov 2001 13:29:48 -0800 (PST) From: ann.s.chen@accenture.com To: dutch.quigley@enron.com Subject: Questions regarding storage Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: ann.s.chen@accenture.com@ENRON X-To: Quigley, Dutch X-cc: X-bcc: X-Folder: \DQUIGLE (Non-Privileged)\Quigley, Dutch\BMR X-Origin: Quigley-D X-FileName: DQUIGLE (Non-Privileged).pst Hi there Dutch! How are you? Hope you're doing well. We having been working on a storage problem that Philip as given us the framework for. In working out the details, we've come across a few questions that we know you can help us answer. I've included Philip's description of this problem in the word doc below, just for reference. 1) In Philip's document, he lists discount factors over the months. We understand that since the users are making storage decisions and hedging future months, they need to take time value of money into account. What is actually being discounted? Is it NYMEX? Is it prices of the instruments? How does that factor into user's storage decisions? 2) In our problem, we ask the user to fill out a storage schedule and then select instruments to hedge positions created by the storage. In our other scenarios we have initial and natural position split out into the Enron risk buckets (Price, Index, Basis, GD) and have users choose the appropriate hedging instruments based on the risk areas the instruments cover. In this storage scenario, the only positions created are by storage decisions. What risk bucket would storage create a position in? My thoughts are that if the only positions created are by storage, then would the user really need only 1 type of instrument to hedge their risks? Thanks in advance for your help, Dutch! Ann (See attached file: Storage Problem.doc) This message is for the designated recipient only and may contain privileged, proprietary, or otherwise private information. If you have received it in error, please notify the sender immediately and delete the original. Any other use of the email by you is prohibited. - Storage Problem.doc