CFA Level 3
Alternative Investments

Understanding Commodity Futures Margin Requirements

Easy Commodities Investment Commodity Futures

John is considering allocating a portion of his investment portfolio to commodity futures as a way to hedge against inflation. He has read that investing in commodity futures can provide both price exposure to commodities and diversification benefits. However, he is unclear about how the mechanics of this investment work, particularly regarding margin requirements and contract specifications.

Which of the following statements about investing in commodity futures is accurate?

Hint

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