For commodity futures: Net convenience yield = (convenience yield − storage costs).

Question

Quizplus · Accepted Answer

This formula is correct for calculating the net convenience yield in commodity futures. The convenience yield represents the benefits of holding a physical commodity, such as the ability to provide immediate delivery to customers, while storage costs represent the costs associated with holding the physical commodity in storage. By subtracting the storage costs from the convenience yield, we arrive at the net benefit of holding the commodity.

For Commodity Futures: Net Convenience Yield = (Convenience Yield −