a. What are some possible explanations for the shape of this forward curve?
b. What annualized rate of return do you earn on a cash-and-carry entered into in December of Year 0 and closed in March of Year 1? Is your answer sensible?
c. What annualized rate of return do you earn on a cash-and-carry entered into in December of Year 0 and closed in September of Year 1? Is your answer sensible? Discuss.