Which one of the following allows an investor to benefit from price changes in commodities without physically owning the commodity?
A)put option
B)call option
C)straddle option
D)commodity contract
E)futures contract

Question

Quizplus · Accepted Answer

A futures contract allows an investor to benefit from price changes in commodities without physically owning the commodity. The investor simply agrees to buy or sell the commodity at a set price and date in the future. This can be used to speculate on price movements or to hedge against potential price changes. Options (A, B, and C) give the owner the right, but not the obligation, to buy or sell a commodity at a certain price and time, whereas a commodity contract (D) is a legally binding agreement to buy or sell a specific commodity at a set price and time.

Which One of the Following Allows an Investor to Benefit