Understanding Risk and Return in Commodities Investment

As a portfolio manager, you are evaluating the role of commodities in your investment strategy. It is important to understand the risk and return characteristics associated with investing in commodities.

Commodities are known for their unique return profiles, which can be influenced by various factors such as supply and demand dynamics, geopolitical issues, and market speculation. An investor considers the potential for returns from commodities relative to traditional equity and debt investments.

Given this context, which of the following statements correctly reflects the risk and return characteristics typical of commodities investment?