passwella.
Menu

JAMB Commerce 2014 Question 35

Question 35

Stock Exchange

The payment made by a speculator to the buyer when he is unable to deliver stocks on the agreed date is

  1. A.arbitrage.
  2. B.franco.
  3. C.contango.
  4. D.backwardation.
Show the answer and explanation

Answer: D (backwardation.)

Explanation

Backwardation is the fee a bear (seller) pays to delay delivering shares he has sold.