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Basic Question 3 of 13
According to the hedging pressure theory, if the two forces of producers and consumers both seeking price protection are equal in weight, then one can envision the futures curve to be ______.
B. in contango
C. flat
A. in backwardation
B. in contango
C. flat
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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.