Understanding Commodity Futures Investments

Commodity futures have become an increasingly popular investment vehicle due to their potential for diversification and inflation hedging. In recent years, the use of commodity futures has grown among institutional investors looking to manage risk in their portfolios. This question explores the benefits and challenges associated with investing in commodity futures.

Discuss the following aspects of commodity futures investments:

1. Define commodity futures and explain how they differ from other types of commodities investment.
2. Identify and discuss at least three advantages of including commodity futures in an investment portfolio.
3. Analyze the risks associated with commodity futures, and how an investor can mitigate these risks.