Which of the Following Is True of Convenience Yield

question 9

Multiple Choice

Which of the following is true of convenience yield?

• A)It is the benefit or premium from holding a financial instrument such as forward contracts and options.
• B)It is the benefit from holding an inventory of the commodity net of its direct storage costs.
• C)Convenience yields affect forward or futures hedge ratios when the maturity of the future obligation hedged matches the maturity of the futures or forward contract used to hedge.
• D)The futures or forward contracts used to hedge the commodity would not vary depending on the date of the future obligation.

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Definitions:

Mentoring Benefits

The advantages gained from a mentoring relationship, including personal and professional growth, skill development, and increased networking opportunities.

Well Prepared

The state of being adequately equipped or ready for a specific task or challenge through thorough planning and organization.

Understand Reasons

The act of comprehending the causes or motivations behind specific actions or events.

Multisource Feedback

An evaluation process where feedback on an individual's performance is collected from multiple sources, including peers, subordinates, and supervisors.