Concept:In stock exchange trading, backwardation is a fee paid by a seller who cannot deliver stocks on the agreed settlement date.
Explanation:When a speculator sells stocks, he is expected to deliver them to the buyer on a specific agreed date.
If he fails or is unable to deliver the stocks on that date, he is said to be in default of delivery.
To compensate the buyer for the delay, the speculator pays a sum of money known as backwardation.
Backwardation is thus a charge paid by the seller to the buyer for postponing the delivery of securities.
It is the opposite of contango, which is paid by a buyer who delays taking delivery of the stocks.
This practice helps the stock market to adjust settlement when delivery cannot be completed on time.
Answer:C. Backwardation