Module Discussion
Explain carefully the meaning of the terms convenience yield and cost of carry. What is therelationship between futures price, spot price, convenience yield, and cost of carry?
Specifications:
Word count for initial discussion response – a minimum of 250 words;
Use relevant references;
Reference
A. Hull, J. (2012). Options, futures, and other derivatives (8th ed.). Boston, MA: Prentice Hall.
B. Brealey, R A, Myers, S C and Marcus, A J,(2008) Fundamentals of Corporate Finance, 6th edition, McGraw Hill