The Spot Price of Wheat Is $2

question 22

Multiple Choice

The spot price of wheat is $2.90/bushel. One year futures price is $3.00/bushel. If the risk- free rate is 5%, calculate the net convenience yield.

• A) -0.019
• B) +0.019
• C) +0.0345
• D) None of the above

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Definitions:

Convenience Goods

Consumer products and services that are widely available and bought frequently with minimal comparison and effort by the consumer.

Account Management Policies

Policies that specify whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out.

Job Security

The probability that an individual will retain their job without the risk of becoming unemployed, often related to the stability of the occupation or industry.

Direct Sales Promotions

Strategies and tactics implemented by companies to sell their products or services directly to consumers, bypassing intermediaries.