Consider the "Reverse Cash and Carry Trade" Where You Buy

Multiple Choice

Consider the "reverse cash and carry trade" where you buy the futures contract, short sell Asset XYZ, and invest or lend until the settlement date. In computing the value "from the loan," which of the below statements is TRUE?

A) rP= principal from maturing of investment
B) P = interest earned on loan
C) P + rP = total proceeds
D) P - rP = payment received from investing in Asset XYZ