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NEW QUESTION: 1
The risk management department of VegaBank wants to set guidelines on commodity carry trades. Which of the following strategies should she pursue to achieve a profitable commodity carry?
I. Buy short-term commodity futures and sell longer-dated position when the curve is in contango.
II. Buy short-term commodity futures and sell longer-dated position when the curve is in backwardation.
III. Buy long-term commodity futures and sell shorter-dated positions when the curve is in contango.
IV.
Buy long-term commodity futures and sell shorter-dated positions when the curve is in backwardation.
A. I, III
B. I, II
C. I, IV
D. II, IV
Answer: C


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