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15. Which of the following correctly define backwardation and contango?

 

  • Backwardation is when futures prices are above their expected price at maturity, whereas contango is when they are below their expected price at maturity.
  • Backwardation is when warehouses quote a negative storage cost, whereas contango is when they quote a positive storage cost.
  • Backwardation is when futures prices are below their expected price at maturity, whereas contango is when they are above their expected price at maturity.
  • Backwardation is when warehouses quote a positive storage cost, whereas contago is when they quote a negative storage cost.

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