(a) True or False: The difference between the price of oil in California and the price of oil in Texas implies that there is an opportunity to arbitrage.

(b) True or False: If the price of corn in market X is higher than market Y, then corn will be transported from market X to Y.

(c) True or False: The basis for a cash market at the futures delivery point will decrease to zero at the expiration of its associated futures contract.

(d) True or False: The basis for all cash markets will decrease to zero at the expiration of its associated futures contract.

(e) We define basis as futures price minus cash price. In general, what is the expected sign of the basis one month prior to expiry for oil sold on the spot market at the futures contracts delivery location?

(i) positive

(ii) negative

(iii) zero