$39.75

$46.94

$43.05

$45.85

942.66

1001.69

937.48

984.36

There is no limit to how high or low the futures

price can be, except that the futures price cannot be negative

There is a lower limit to the futures price but

no upper limit

The futures price can be determined with

reasonable accuracy from the spot price and interest rates

There is an upper limit to the futures price but

no lower limit, except that the futures price cannot be negative

The trader should borrow the price of the asset,

buy one unit of the asset and enter into a long forward contract to buy the

asset in one year.

The trader should short the asset, invest the

proceeds of the short sale at the risk-free rate, enter into a long forward

contract to buy the asset in one year

The trader should short the asset, invest the

proceeds of the short sale at the risk-free rate, enter into a short forward

contract to sell the asset in one year

The trader should borrow the price of the asset, buy one unit of the

asset and enter into a short forward contract to sell the asset in one year.

10

15

5

20

The convenience yield measures

the average return earned by holding futures contracts.

The convenience yield is always positive for an

investment asset.

The convenience yield is always positive or

zero.

The convenience yield is always

negative for a consumption asset.

A

position where an option has been sold

A position where there is less than one year to

maturity

A position that has been held for a short time

A position in an option lasting less than three months