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Basic Question 13 of 13

For a non-perishable commodity that has a cost of carry, we should expect ______ for futures prices (other things being equal).

A. contango
B. backwardation
C. forewardation
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User Contributed Comments 3

User Comment
abs013 What is the cost of carry?
KYZKYZ Cost of carry is nothing but the storage cost
khalifa92 storage and interest
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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

Tamara Schultz

Learning Outcome Statements

compare theories of commodity futures returns;

describe, calculate, and interpret the components of total return for a fully collateralized commodity futures contract;

contrast roll return in markets in contango and markets in backwardation;

CFA® 2025 Level II Curriculum, Volume 5, Module 33.