LOS o: Discuss the relationship between commodities and inflation and explain why some commodity classes may provide a better hedge against inflation than others.
Q1. Which of the following commodities is least likely to have returns that are positively correlated with inflation?
A) Energy.
B) Industrial metals.
C) Corn.
Q2. As an investment, the commodity energy is:
A) nonstorable and a hedge against inflation.
B) nonstorable but not a hedge against inflation.
C) storable and a hedge against inflation.
Q3. Commodities can be categorized into storable and nonstorable. Which category, if any, should an analyst recommend as a hedge against inflation?
A) Storable commodities.
B) Both storable and nonstorable commodities.
C) Nonstorable commodities. |