CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

The benefits from direct commodity investments are least likely to include:

A. Inflation hedging.
B. Steady cash flows.
C. Portfolio diversification.
D. Outperformance during periods of economic growth.
Correct Answer: B

Direct investments in commodities do not provide cash flows and generally have high diversifiable risk. However, there is evidence that commodities are good inflation hedge, provide a significant degree of portfolio diversification due to their low correlations with other asset classes, and perform well during periods of growth.

User Contributed Comments 0

You need to log in first to add your comment.