What effect does the trend in spot prices have

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Reference no: EM131247260

Your team of agricultural experts has observed that spot prices of rutabagas show a definite pattern, rising from January through June, then falling toward a December low. You wish to buy contracts for May delivery.

a) What effect does the trend in spot prices have on the time pattern of the futures price for May contracts?

b) What effect does the trend in spot prices have on the variance of prices for May contracts sold in February?

Reference no: EM131247260

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