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14-04-2020
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Which of the following describes contango? A. The futures price is below the expected future spot price B. The futures price is below today’s spot price C. The futures price is a declining function of the time to maturity D. The futures price is above the expected future spot price

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15-04-2020

Answer:

D. The futures price is above the expected future spot price

Explanation:

Contango is the phenomenon in which the future prices of a commodity are higher than the current or future spot prices. This situation occurs when the commodity's price is expected to rise over time, which results in an upward sloping forward curve.

Therefore, the answer that fits the description is alternative D.

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