If we observe that the price of orange juice futures is extremely high, we might conclude that:
A) there will be a bumper crop of oranges in the future.
B) bad weather is expected to destroy orange crops.
C) there will be weak demand conditions for oranges in the future.
D) good weather is expected in orange-growing areas.

Question

Quizplus · Accepted Answer

When the price of orange juice futures is extremely high, it suggests that there is an expectation of bad weather that will result in the destruction of orange crops. This may cause a shortage of orange juice in the future, leading to higher prices. Other factors such as weak demand conditions or good weather are unlikely to result in such a spike in prices.

If We Observe That the Price of Orange Juice Futures