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Basic Question 10 of 13
The primary argument for adding commodities to traditional portfolios is ______.
B. that commodities provide a reduction in portfolio risk
C. return-timing diversification
A. inflation shock and liability matching
B. that commodities provide a reduction in portfolio risk
C. return-timing diversification
User Contributed Comments 4
| User | Comment |
|---|---|
| latteLover | can anyone help explain? |
| ljamieson | diversification. |
| 8thlegend | The note mentioned that it is negatively correlated to equity investments. So if the stocks are tanking people would go to buy commodity(gold) to make sure that their investment is safe. |
| happymind | I think all are correct answer but because "Primary" was there in question so the answer is B |
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Learning Outcome Statements
compare theories of commodity futures returns;
describe, calculate, and interpret the components of total return for a fully collateralized commodity futures contract;
contrast roll return in markets in contango and markets in backwardation;
CFA® 2025 Level II Curriculum, Volume 5, Module 33.