Explain the cost of carry in a backwardation market

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Why is the value of a futures or forward contract at the time it is purchased equal to zero? Contrast this with the value of the corresponding spot commodity?

Identify and provide a brief explanation of the factors that affect the spot price of a storable asset?

What is a contango market? How do we interpret the cost of carry in a contango market? What is a backwardation market? How do we explain the cost of carry in a backwardation market?

Reference no: EM131324143

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