A:

a. The basis is positive.

b. Future prices are higher than cash prices.

c. The market is in backwardation.

d. Supply disruptions are abating.


Answer: B

The other answers are associated with backwardation, the opposite of contango.

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RELATED TERMS
  1. Contango

    A situation where the futures price of a commodity is above the ...
  2. Backwardation

    A theory developed in respect to the price of a futures contract ...
  3. Roll Yield

    The amount of return generated in a backwardated futures market ...
  4. Convergence

    The movement of the price of a futures contract towards the spot ...
  5. Abatement

    A reduction in the level of taxation faced by an individual or ...
  6. Structural Change

    An economic condition that occurs when an industry or market ...
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