Question: Sum this up in casual human sounding paragraph Commodities are investments distinguished by their emphasis on futures contracts, their emphasis on physical commodities, or both.
Sum this up in casual human sounding paragraph Commodities are investments distinguished by their emphasis on futures contracts, their emphasis on physical commodities, or both. Commodities are homogeneous goods available in large quantities, such as energy products, agricultural products, metals, and building materials. Futures contracts refer to traditional futures con-tracts, as well as closely related derivative products, such as forward contracts and swaps. Most of the investments covered in the commodities section of the CAIA curriculum involve futures contracts. Futures contracts are regulated distinctly and have well-defined economic properties. For example, the analysis of futures contracts typically emphasizes notional amounts rather than the amount of money posted as collateral or margin to acquire positions. Commodities as an investment class refer to investment products with somewhat passive (i.e., buy-and-hold) exposure to commodity prices. This exposure can be ob-tained through futures contracts, physical commodities, natural resource companies, and exchange-traded funds
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