For Commodity Forwards and Futures, Which of the Following Statements

Multiple Choice

For commodity forwards and futures, which of the following statements is valid?

A) The presence of a convenience yield means that the market will be in contango.
B) Convenience yields may lead to the market being in backwardation.
C) If there are storage costs, the convenience yield is zero-it is no longer convenient to hold the commodity.
D) As supply becomes plentiful, convenience yields will rise.