In Summarizing the Effect of Carry on the Difference Between

question 10

Multiple Choice

In summarizing the effect of carry on the difference between the futures price and the cash market price in this way, which of the below statements is FALSE?

• A) If the carry is positive (y > r), then the futures price will sell at a discount to cash price (F < P).
• B) If the carry is negative (r > y), then the futures price will sell at a premium to cash price (F > P).
• C) If the carry is zero (r = y), then the futures price will be equal to the cash price (F = P).
• D) None of these

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Definitions:

Contraprepared

A concept related to learning and behavioral psychology, suggesting certain behaviors or responses are more difficult to learn due to evolutionary predispositions.

Seligman

Refers to Martin Seligman, a prominent psychologist known for his work on the theory of learned helplessness and positive psychology.

Behavior

The observable actions or responses of an organism, often in response to environmental stimuli.

Sign Stimuli

Specific features or cues in an organism's environment that trigger a fixed action pattern or innate response.