Question 589 future, contango, market efficiency
In general, stock prices tend to rise. What does this mean for futures on equity?
(a) Equity futures prices tend to be higher than spot prices. This is called contango.
(b) Equity futures prices tend to be equal to spot prices.
(c) Equity futures are generally under-priced.
(d) Equity futures are generally over-priced.
(e) Long equity futures traders tend to make more money than short equity futures traders.