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?


Word count for initial discussion response – a minimum of 250 words;

Use relevant references;


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