CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

As the carry costs increase, the forward price ______.
A. increases
B. decreases
C. flunctuates (may increase or decrease)
Explanation: Carry costs increase the carry burden of the arbitrageur. In other words, the costs make it more costly to carry and hence the forward price is higher.

How about the case where the storage cost is enormously high?

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