- CFA Exams
- CFA Level I Exam
- Topic 8. Alternative Investments
- Learning Module 33. Introduction to Commodities and Commodity Derivatives
- Subject 3. Valuation of Commodities
CFA Practice Question
The valuation of commodities is based on ______.
B. the estimation of future cash flows
C. a discounted forecast of future possible prices
A. the estimation of future profitability
B. the estimation of future cash flows
C. a discounted forecast of future possible prices
Correct Answer: C
In turn, the future possible prices are based on such factors as the supply and demand of the physical item.
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