Explanation

The futures-spot parity relationship with carry cash flows is:

F = S₀ × (1 + r)^T - FV(Benefits) + FV(Costs)

Where:

• F = Futures price
• S₀ = Spot price
• r = Risk-free rate
• T = Time to expiration
• FV(Benefits) = Future value of benefits (dividends, coupons, etc.)
• FV(Costs) = Future value of costs (storage, insurance, etc.)

This can be rewritten as: F = [S₀ × (1 + r)^T] - Benefits + Costs

So the futures price equals the future value of the spot price:

• Minus carry benefits (which reduce the cost of carry)
• Plus carry costs (which increase the cost of carry)

Therefore, the correct answer is A: minus carry costs and plus carry benefits.