As inventories of a commodity decline, which of the following is true?
A. The one-year futures price as a percentage of the spot price increases
B. The one-year futures price as a percentage of the spot price decreases
C. The one-year futures price as a percentage of the spot price stays the same
D. Any of the above can happen
B
When inventories decline, the convenience yield increases and the futures price as a percentage of the spot price declines.
You might also like to view...
Osprey Company is trying to decide between the following two alternatives: Alternative A Alternative BProjected revenue$50,000 $60,000 Direct material 6,000 12,000 Assembly labor 9,000 9,000 Production supervisor's salary 10,000 10,000 Facility-related costs 10,000 15,000 Profit$15,000 $14,000 Which of the following conclusions can be drawn from this example?
A. Relevant costs may include variable costs and fixed costs. B. Fixed costs are sunk and thus are never relevant for decision making. C. Variable costs are always relevant for decision making. D. None of the above.
Maxwell’s manager asked for Maxwell’s user name, password or other login credentials for Maxwell’s personal social media accounts so that the manager could see what Maxwell shared with friends and family about work and other topics. This could be a violation of Maxwell’s right to ______.
A. free consent B. due process C. privacy D. freedom of conscience
Companies engage brand authors to
A) write best-selling books. B) invent hot-selling products. C) create a brand culture. D) investigate cases of illegal brand copying. E) sit for media interviews.
In the United States, banks are regulated by the Financial Services Authority (FSA)
Indicate whether the statement is true or false