Commodity futures pricing
A. must be related to spot prices.
B. includes cost of carry.
C. converges to spot prices at maturity.
D. All of the options are correct.
E. None of the options.
D. All of the options are correct.
Commodity futures are similar to other types of futures contracts but the cost of carrying must be considered.
The cost of carrying includes interest costs, storage costs, and allowance for spoilage.
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