Assume that futures market prices are set in accordance with the theory of normal backwardation. At the point when positions are initially established by hedgers and speculators, their expectations about profits for the positions they took in the futures market are such that:. a. Their expectations will be based on whether they consider the current futures prices to be overvalued or undervalued.
b. Speculators expect a profit and hedgers expect a loss.
c. Hedgers expect a profit and speculators expect a loss.
d. Hedgers and speculators both expect a profit.