Based on economist Richard Roll's work, the best way to predict future weather may be:
A) to listen to meteorologists.
B) to look at the difference between futures and spot prices of orange juice.
C) to wait and see what the weather turns out to be.
D) to look at past trends in orange production.

Question

Quizplus · Accepted Answer

Richard Roll's work suggests that the difference between futures and spot prices of orange juice can be used to predict future weather trends, specifically for freeze events that can damage orange crops. This is because futures prices reflect expectations for future supply and demand based on weather forecasts and other factors. Therefore, changes in futures prices relative to spot prices can signal changes in weather expectations, making it a potentially useful predictor for farmers and traders in the orange juice market.

Based on Economist Richard Roll's Work, the Best Way to Predict