At time = 0, a trader takes a long position in a futures contract on stock that will expire at time T. Rearranging McDonald equation (6.5), the present value of this contract to the long is given by: 0 + 0 [ ] Where is the annualized risk-free rate, and the discount rate applied to 0[], the expected price of stock at time , is given by the annualized CAPM rate of return = + ([] ). Assume no-arbitrage pricing. Show analytically that if the return from stock is positively correlated with the overall return on the stock market, the market risk premium is positive, and stock is risky, then the futures market must be in backwardation at time = 0.