March what futures are trading at $4.20 a bushel and May wheat futures are trading at $4.35 a bushel. You expect the spread between May and March futures prices to widen. To speculate on this view, you would
A) Go long March futures and short May futures.
B) Go long May futures and short March futures.
C) Go long May futures.
D) Go long March futures.

Question

Quizplus · Accepted Answer

The spread between May and March futures prices is expected to widen, meaning May futures will become more expensive compared to March futures. To profit on this view, one should go long May futures and short March futures, which is essentially betting that the price difference between the two will widen. Therefore, the correct choice is B.

March What Futures Are Trading at $4