The futures price can be expressed as:

Futures price = Spot price × (1 + r) + (Storage costs - Convenience yield)

Futures price = Spot price × (1 + r) + (Storage costs - Convenience yield)

Where r is the short-term risk-free interest rate.

• Option A (Negative): If the risk-free rate is negative, the futures price would be less than the spot price, not greater.
• Option B (Zero): If the risk-free rate is zero, the futures price would equal the spot price, not exceed it.
• Option C (Positive): If the risk-free rate is positive, the futures price will exceed the spot price, as the formula simplifies to Futures price = Spot price × (1 + r) when storage costs equal convenience yield. This is the correct answer.