Answer: A The calendar spread is positive

## Explanation When commodity futures prices are in contango: - **The calendar spread is positive** - This is correct because contango means longer-term futures prices exceed near-term futures prices - **The commodity forward curve is downward sloping** - This describes backwardation, not contango. Contango has an upward-sloping forward curve - **The futures contract value tends to erode over time** - While this can occur as futures converge to spot prices, it's not the defining characteristic of contango Contango is defined by an upward-sloping forward curve where futures prices exceed spot prices, creating positive calendar spreads.

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