- CFA Exams
- CFA Level I Exam
- Study Session 17. Alternative Investments
- Reading 50. Introduction to Alternative Investments
- Subject 5. Commodities and other altenative investments
CFA Practice Question
For a commodity, a backwardation occurs when:
A. there is a high risk-free rate.
B. there is a high storage cost.
C. there is a high convenience yield.
Explanation: When there is a high convenience yield the futures prices will be likely lower than the spot price.
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