Tilife A, R, and Care three non-cyclical commodities traded on a futures exchange. On Agril I, the senlement prices of their June and December Anrwer questions 5 and 6 tased on the following information Use the a funres contracts are given as 500 526 200 100 106 JUNE DECEMBER 212 5. Given the above peice information, which of these commodities coula ible have a positive convenience value? a Only A h Oly B. c Only C dA, B, and C. e. None of them reec- 6. If the 6-month June-December T-Bill rate is 5 %, (ie. 10% / 2) and the 6- month storage costs for A, B and Care S1, $2 & $3 respectively, the convenience values for A, Band C respectively are: a 0.0.0 b. 2, 2, 2 c. 0,0,-2 d. 0, 0,2 e None of the above. 7. We talked about a hedger trying to reduce "inventory" risk by shorting a futures contract. Which of the following is not a valid reason as to why he did not eliminate this inventory risk by simply selling the commodity in the spot market instead of hedging? a. He does not have the commodity in his possession. b. He has liquidity problems in the cash market. c. He believes the cash market price will increase. d. He has high transaction costs in the spot market. e. All of the above are valid reasons. COPPE he answers to colu wer questions 1, 2, 3, and 4 based on y LACTAL )N 15-8