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Derivatives
Derivatives
Medium
A commodity futures contract on copper is positively correlated with short-term interest rates. Compared to an otherwise identical forward contract on copper, the futures price is most likely:
A
Higher than the forward price
B
Lower than the forward price
C
Equal to the forward price
D
Higher or lower depending on the convenience yield
Select an answer to continue
Tags
#futures-vs-forwards
#convexity-adjustment
#daily-settlement
#interest-rate-correlation
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CFA Level II — Derivatives Practice Question | AcadiFi | AcadiFi