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

Question

Quizplus · Accepted Answer

Participating in the commodities market involves significant risk, including the potential for large losses and the necessity to meet margin calls, but it does not imply that making a profit is easy or that one should spend all available cash on margin deposits.

If an Investor Is Going to Participate in the Commodities