Multiple Choice
In summarizing the effect of carry on the difference between the futures price and the cash market price in this way, which of the below statements is FALSE?
A) If the carry is positive (y > r) , then the futures price will sell at a discount to cash price (F < P) .
B) If the carry is negative (r > y) , then the futures price will sell at a premium to cash price (F > P) .
C) If the carry is zero (r = y) , then the futures price will be equal to the cash price (F = P) .
D) None of these
Correct Answer:
Verified
Correct Answer:
Verified
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