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LOS e: Describe backwardation and contango.
Q1. Backwardation refers to a situation where:
A) the futures price is above the spot price.
B) long hedgers outnumber short hedgers.
C) the futures price is below the spot price.
Q2. Which of the following best defines backwardation? The market is said to be in backwardation if:
A) the futures price exceeds the cash price or the distant futures price exceeds the nearby futures price.
B) the futures price exceeds the cash price.
C) the cash price exceeds the futures price.
Q3. A situation where the futures price is below the spot price of the asset is called:
A) contango.
B) negative carry.
C) backwardation.
Q4. How is market backwardation related to an asset's convenience yield? If the convenience yield is:
A) negative, causing the futures price to be below the spot price and the market is in backwardation.
B) positive, causing the futures price to be below the spot price and the market is in backwardation.
C) larger than the borrowing rate, causing the futures price to be below the spot price and the market is in backwardation.
Q5. A situation where the futures price is above the spot price of the underlying asset is called:
A) contango.
B) positive carry.
C) normal backwardation.
A situation where the futures price is above the spot price of the asset is called contango. | 
发表于 2009-3-27 17:11
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