Commodity Futures Pricing

question 22

Multiple Choice

Commodity futures pricing

• A) must be related to spot prices.
• B) includes cost of carry.
• C) converges to spot prices at maturity.
• D) All of the options are correct.
• E) None of the options.

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Definitions:

Life Estate

A legal right to use and derive benefit from property for the duration of one's life, without ownership transferring until after death.

Mineral Rights

The legal rights to exploit and use minerals found beneath the surface of a parcel of land, which can be separated from the land's surface rights.

Water Rights

The legally granted permission to use water from a river, stream, or other body for designated purposes.

Airspace

The portion of the atmosphere above a particular land area, especially that controlled by a specific country or jurisdiction.