Assignment

MODULE 4 DISCUSSION

Explain carefully the meaning of the terms convenience yield and cost of carry. What is the
relationship between futures price, spot price, convenience yield, and cost of carry?

 PRESCRIBED READING:

Chapter 5, Credit Derivatives. Hull, J. (2012). Options, futures, and other derivatives (8th ed.). Boston, MA: Prentice Hall.

REQUIREMENTS:

• Please ensure that the discussion question response is substantive in nature, which includes 500 words.

• Include other sources apart from the prescribed readings. These should be from 2010.