Correct answer: B. The amount of snowfall in New York

Explanation: Weather derivatives have existed for decades. The Chicago Mercantile Exchange has offered contracts linked to snowfall in cities including New York.

These contracts allow businesses exposed to weather risks to protect themselves financially. For example, a company that loses money during a snowless winter could use a snowfall contract to offset some of its losses.

And that’s what makes S&P’s Kalshi deal interesting. Financial markets are increasingly finding ways to put a price on things that have nothing to do with shares, bonds or commodities.