convenience yield vs. roll yield

CFA Level I
#1

Is there any difference between convenience yield and roll yield?

#2

They’re about as different as corn syrup and Cornwallis.

Convenience yield is the benefit you get from holding an asset instead of simply holding a forward on that asset.

Roll yield is the amount you make when you roll one (expiring) forward contract into another forward contract.

#3

"When investing in commodities through a collateraized commodity futures position, the return associated with rolling forward the maturity of a futures contract is referred to as the

  1. collateral yield

  2. spot price return

  3. convenience yield

Not sure how it would be 3. I feel like the answer is rolling yield (but the answer key claims convenience yield and rolling yield are the same thing).

#4

It isn’t 3.

They’re wrong.

Where’d you get this stupid question?

#5

In the reading it’s said that the roll yield depends on the convenience yield: if convenience =0 => S roll yield is negative; and vice versa.

@magician , why roll yield is negative when Forward > spot ??

#6

2010 mock exam. Provided by the CFA institute I believe.

#7

Roll yield does depend on convenience yield, but they’re not the same thing.

Roll yield (to the long) is negative when forward prices are higher than spot prices because you have to roll into a higher price, so you’re paying more money.