The value of a futures contract for storable commodities can be determined by the _______ and the model __________ consistent with parity relationships.
A)CAPM, will be
B)CAPM, will not be
C)APT, will not be
D)APT, will be
E)A and D

Question

Quizplus · Accepted Answer

The correct answer is E because the CAPM (Capital Asset Pricing Model) is not consistent with parity relationships, while the APT (Arbitrage Pricing Theory) is consistent with parity relationships.

The Value of a Futures Contract for Storable Commodities Can