Question #12
Reading: Reading 32 Introduction to Commodities and Commodity Derivatives
PDF File: Reading 32 Introduction to Commodities and Commodity Derivatives.pdf
Page: 4
Status: Correct
Correct Answer: A
Question
An investor establishes a long position in 800 WTI (oil) contracts at $45 per barrel. Which of the following components of investor's return will have a non-negative value?
Answer Choices:
A. price return
B. roll return
C. rebalancing return
Explanation
Rebalancing return is applicable on a commodity index (or portfolio) and is zero for a
single commodity position.