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Basic Question 4 of 7
When a commodity market is in contango, the roll yield is most likely ______.
B. positive
C. negative
A. zero
B. positive
C. negative
User Contributed Comments 1
| User | Comment |
|---|---|
| khalifa92 | spot price < future price = upward slope & contango (negative roll) spot price > duture price = downward slope & backwardation (positive roll) forward = spot(1+r) + storage cost - convenience yield the difference between spot and forward is roll yield |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe features of commodities and their investment characteristics
analyze sources of risk, return, and diversification among natural resource investments
CFA® 2025 Level I Curriculum, Volume 5, Module 5.