CFA Practice Question
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
Correct Answer: B
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 |