A(n) _________ market occurs when a positive basis is observed.
A) Parity
B) Inverted
C) Basis
D) Arbitrage
E) Carrying-charge

Question

Quizplus · Accepted Answer

An inverted market occurs when the current cash prices are higher than the futures prices, leading to a positive basis. This situation is opposite to the normal or carrying-charge market, where futures prices are higher than the current cash prices due to storage costs and other factors.

A(n) _________ Market Occurs When a Positive Basis Is Observed