If There Is a Convenience Yield,then the Following Is True

question 15

Multiple Choice

If there is a convenience yield,then the following is true of the forward price:

• A)The forward price is higher than it would be if there were no convenience yield.
• B)The bid price may be higher than the ask price on the forward.
• C)The forward price does not depend on the convenience yield.
• D)The forward price is lower than it would be with no convenience yield.

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Definitions:

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, coordinating voluntary and involuntary actions.

Behavioral Myopia

Refers to the tendency in behavior analysis to focus narrowly on immediate consequences, ignoring longer-term outcomes and wider impacts.

Wanting-and-liking Theory

A theory in psychology that distinguishes between the desire for a reward (‘wanting’) and the pleasure derived from that reward (‘liking’).

Addiction

A complex condition, a brain disorder characterized by compulsive engagement in rewarding stimuli despite adverse consequences.