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Suppose the spot price of a commodity is $16 per unit. The 3, 6, 9, and 12-month forward prices for the commodity are $15.88, $15.75,
Suppose the spot price of a commodity is $16 per unit. The 3, 6, 9, and 12-month forward prices for the commodity are $15.88, $15.75, $15.63, and $15.51, respectively. This forward curve is an example of...
a. backwardation.
b. neither contango nor backwardation.
c. contango.
d. both contango and backwardation.
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