Futures and spot prices

Hey guys,

I’m sorry in advance that I can’t tell you which mock this is from since my papers are all jumbled.

Either way, on Q # 28 of either 2011 or 2012, it asks a question about spot prices, futures prices and risk premiums.

According to the answer, the futures price = spot price - premium. Stated differently, futures + premium = spot price.

Wouldn’t that mean that spot price> futures price?

Isn’t that backwardation? I thought the normal state is for contango ~ i.e. when futures>spot price.

Please enlighten me on this topic… i’m getting so confused!