A contango market is consistent with
A)a negative basis
B)futures prices exceeding spot prices
C)a positive cost of carry
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

In a contango market, futures prices exceed spot prices, which is consistent with a positive cost of carry. As a result, the basis (difference between futures and spot prices) is negative. So all of the above options are correct.

A Contango Market Is Consistent with