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WAEC Commerce 2014 Question 33

Question 33

Stock Exchange

An amount paid by a bull who wishes to defer the purchase of shares to the next accounting period is

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

Answer: C (contango.)

Explanation

A bull who postpones settlement pays contango.