Chartered Financial Analyst Level 2

Explanation

If the calendar spread in the futures market is positive:

• The price of the near-term futures contract is above the price of the longer-term futures contract - This is correct. A positive calendar spread means near-term futures trade at a premium to longer-term futures
• Spot price is above the price of the near-term futures contract - This would indicate backwardation, not a positive calendar spread
• Spot price is above the price of the longer-term futures contract - This is not the definition of a positive calendar spread

A positive calendar spread occurs when near-term futures prices are higher than longer-term futures prices, which is characteristic of backwardation markets.