Understanding the S&P GSCI Commodity Index

Medium Commodities Investment Commodity Indices

In recent years, interest in commodities as an asset class has grown, leading to the development of various commodity indices which allow investors to gain exposure to the performance of a basket of commodities. One such index is the S&P GSCI, which is often referenced in discussions about commodity investments.

Investors should be aware of the characteristics and underlying methodologies of different commodity indices before making investment decisions. Understanding how these indices are constructed and their weighting methodologies can significantly impact investment outcomes.

Which of the following statements about commodity indices, specifically the S&P GSCI, is accurate?

The S&P GSCI index is equally weighted across all commodities included in the index.

The S&P GSCI includes only energy commodities, excluding metals and agricultural products.

The S&P GSCI is weighted based on the amount of production of each commodity.

Hint

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