Which one of the following best defines a carrying-charge market?
A) market where interest is charged on the margin balance
B) cash price is less than the futures price
C) positive basis market
D) spot market price is greater than the cash price
E) spot market price exceeds the futures price

Question

Quizplus · Accepted Answer

A carrying-charge market is one where the cash price is less than the futures price, reflecting the costs of carrying the commodity over time, such as storage and interest.

Which One of the Following Best Defines a Carrying-Charge Market