If an Investor Is Going to Participate in the Commodities

question 10

Multiple Choice

If an investor is going to participate in the commodities market by buying a contract, he/she should do which of the following?
I.realize that making a profit is relatively easy
II.be mentally prepared for an enormous loss
III.be financially able to meet repeated margin calls
IV.spend all of their available cash on margin deposits

• A) I, II and III only
• B) II and III only
• C) II and IV only
• D) II, III and IV only

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Definitions:

Creep

The slow, continuous movement of material, such as soil and other weak materials, down a slope.

Prehistoric Slope Failures

Landslides and similar geologic occurrences that took place before recorded history, often detected through sediment analysis.

Hummocky Topography

A type of chaotic landscape characterized by randomly distributed humps and pits, commonly created by a landslide or less commonly by a pyroclastic eruption.

Sedimentary Deposits

Accumulations of mineral and organic particles settled out of water or air, forming distinct layers on the Earth's surface.