Answer: minus carry costs and plus carry benefits.

## 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**.

Author: LeetQuiz Editorial Team