Commodities Risk and Return Characteristics

Very Easy Commodities Investment Risk And Return

In the context of commodities investment, investors often consider the risk and return characteristics of various asset classes.

One of the key features of commodities is their tendency to provide a hedge against inflation. This means that as the prices of goods and services rise, commodities may also experience an increase in value.

Which of the following statements best describes the relationship between commodities, risk, and return?

Commodities generally provide higher returns than stocks over long periods of time.

Commodities offer low volatility and predictable returns.

Commodities can serve as a hedge against inflation, impacting their risk-return profile.

Hint

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