Understanding Physical Commodities Investment

Medium Commodities Investment Physical Commodities

As an investor considering a diversified portfolio, you are evaluating the merits of physical commodities. You are particularly interested in the characteristics of various physical commodities and how they relate to market trends and investment performance. A colleague suggests that physical commodities have a unique risk-return profile compared to traditional equities and fixed income.

Which of the following statements about investing in physical commodities is most accurate?

Physical commodities are less volatile than equities, making them a safer investment.

Investing in physical commodities provides a hedge against inflation and currency risk.

Physical commodities are not suitable for long-term investment due to their dependence on well-established companies.

Hint

Submitted16.1K

Correct12.9K

% Correct80%