Alternative Investments Q91

0. Which of the following is least likely a reason to invest in commodity derivatives?

A
Commodity related stocks have a positive correlation with the overall equity market.
B
Commodity prices tend to be positively correlated with inflation.
C
It eliminates the need to understand the physical supply chain and general supply-demand dynamics of a commodity.

Answer
Comment
Array

Option : C
Explanation : The prices of commodity derivatives are highly dependent on the underlying commodity prices which is why it is very important to understand the physical supply chain and general supply–demand dynamics of a commodity

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