Question 3 (15 marks) (a) (8 marks) Briefly explain the behavior that commodity prices usually...

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Finance

Question 3 (15 marks)

(a) (8 marks) Briefly explain the behavior that commodity prices usually exhibit during the different phases of the business cycle.

(b) Briefly define the following terms of a commodity futures contract:

(i) (2 marks) Collateral yield

(ii) (2 marks) Convenience yield

(c) (3 marks) A portfolio managers skill has produced an average annual information coefficient equal to 0.08. If the manager wants to have an information ratio greater than 2, how many trades must the manager make in a year?

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