15) Which of the following can explain a backwardation? a. the interest rate exceeds the dividend yield. b. the cost of carry is negative. c. futures prices exceed forward prices. d. the market is at full carry. e. none of the above. normal contango? a. the following best describes norm price. b. the spot price is less than the futures price. c. the futures price is less than the futures price. d. the cost of carry is negative. e. none of the above. The futures price changes to $147, sold a futures contract at $150. If the futures price -to-market? what is the value of this contract a. $0.00 b. $3.00 c. $3.00 d. it is impossible to tell. e. none of the above. 18) Suppose it is currently July, the September futures price is $60 and the December futures price is $68. What does the spread of $8 represent? a. the cost of carry from July to September. b. the expected risk premium from July to September. c. the cost of carry from September to December. d. the expected risk premium from September to December. e. none of the above. 19) Suppose there is a risk premium of $0.50. The spot price is $20 and the cost of carry is $2. What is the expected spot price at expiration? a. $21.50 b. $22.50 c. $20.50 d. $24.50 e. none of the above. 20) The transaction designed to exploit mispricing in the relationship between futures and spot prices is called: a. a repurchase agreement. b. a hedge. c. speculation. d. carry arbitrage. e. none of the above