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(Revised from original 1992 version)
Note on Commodity Futures
Describes how commodity futures work, what products and exchanges are available, and who the players in the commodity markets are. Also presents a careful discussion of the pricing of futures in commodity markets, focusing on cost of carry and risk premium approaches, and explaining backwardation and contango markets.
Keywords: Futures and Commodity Futures;
Froot, Kenneth A., Jay O. Light, and Nancy Donohue. "Note on Commodity Futures." Harvard Business School Background Note 293-018, May 1996. (Revised from original July 1992 version.)