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The spot price for oil is $50 per barrel, while the one-month futures settlement price is $40 per barrel. Which of the following statements is
The spot price for oil is $50 per barrel, while the one-month futures settlement price is $40 per barrel. Which of the following statements is true?
A. The oil market is in backwardation
B. The oil market is in contango
C. It is certain that the spot price in one month will be $40
D. It is an unusual situation because typically the futures price equals the spot price
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