In a carrying charge market,
A) The basis is negative
B) The basis is zero
C) The cash price will equal the futures price
D) The cash price will exceed the futures price
E) None of the above

Question

Quizplus · Accepted Answer

In a carrying charge market, the basis is negative because the futures price is higher than the cash price, reflecting the costs associated with storing and financing the commodity until delivery.

In a Carrying Charge Market