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Basic Question 7 of 13

Under the storage hypothesis, commodities that are stored regularly should be ______.

A. in contango
B. in backwardation
C. flat
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User Contributed Comments 1

User Comment
krunk backwardation could be a signal of current shortage of the commodity, so would fall within the context of global supply and demand.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

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.