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LOS e: Discuss why investing in commodities offers diversification opportunities during periods of economic fluctuation in the short run and inflation in the long run.
Q1. Which of the following statements best describes why commodities may offer portfolio diversification benefits to a portfolio of stocks?
A) Commodity returns are strong during the early stages of expansion.
B) Commodity returns are strong during the late stages of expansion.
C) Commodity returns are negatively correlated with inflation.
Q2. A pension fund with an aging retirement population would most likely benefit from adding commodity futures to its portfolio since:
A) the fund’s liabilities are valued in real, while commodities are generally valued in nominal terms.
B) the fund’s liabilities are valued in nominal, while commodities are generally valued in real terms.
C) neither the fund’s liabilities nor the commodities are valued in real terms.
Q3. Jean Chan, CFA, is an analyst following the commodity futures market. In a conversation with a colleague, Chan mentions that precious metals generally have limited contango, which makes them a weak hedge against inflation in the long run.
Are Chan’s comments on precious metals correct?
A) No, because precious metals provide long-term inflation protection.
B) No, because precious metals do not have limited contango.
C) Yes.
Q4. Which of the following portfolios will most likely provide the greatest amount of downside protection?
A) 55% U.S. stocks, 35% U.S. bonds, and 10% commodities.
B) 55% U.S. stocks, 35% U.S. bonds, and 10% TIPS.
C) 55% U.S. stocks, 35% U.S. bonds, and 10% foreign stocks. | 
发表于 2009-3-10 13:54
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