Exercise
Answer true or false.
1. _____ Carrying costs only apply to agricultural products.
2. _____ Cost of carry can sometimes refer to interest charges.
3. _____ When the price difference between two contracts having two different delivery months equals the full cost of carry, the market is known a normal market.
4. _____ In an inverted market, the price of a futures contract becomes progressively higher with the extension of the contract over time.
5. _____ Backwardation and contango are opposite conditions.
6. _____ Contango is a condition more typical for agricultural commodities in stable markets; backwardation is more typical for products in volatile markets.
7. _____ A