CFA Practice Question
Under the storage hypothesis, commodities that are stored regularly should be ______.
B. in backwardation
C. flat
A. in contango
B. in backwardation
C. flat
Correct Answer: A
If the storage cost of a commodity is high, it should have a higher price in the future.
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. |