Assume the Futures Price of a Commodity Is Equal to the Future

question 75

Multiple Choice

Assume the futures price of a commodity is equal to the future value of the cash price, calculated at the risk-free rate. Given this, which one of the following terms applies to the market for this commodity?

• A)positive basis equilibrium
• B)humped market
• C)inverted market
• D)time equilibrium
• E)spot-futures parity

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Definitions:

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