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A commodities dealer is exploring the various factors influencing the pricing of commodity futures contracts. In addition to supply and demand fluctuations, the dealer identifies that storage costs, rental expenses, and convenience yield (the non-monetary benefits of holding onto the physical commodity) can also impact the prices of these futures. Which of the following statements most precisely describes one of these factors?
A
Storage cost is the main factor influencing the prices of long-term commodity futures contracts on industrial metals.
B
Lease rates on commodities are typically equal to the relevant risk-free interest rate and have a lower bound of zero.
C
Storage costs of agricultural commodities cause futures prices to display a mixture of normal and inverted pricing patterns.
D
Convenience yield is a charge subtracted from the lease rate by the lender of a commodity