Normal Backwardation

question 20

Multiple Choice

Normal backwardation

• A) maintains that for most commodities,there are natural hedgers who desire to shed risk.
• B) maintains that speculators will enter the long side of the contract only if the futures price is below the expected spot price.
• C) assumes that risk premiums in the futures markets are based on systematic risk.
• D) a and b.
• E) b and c.

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