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

Question

Quizplus · Accepted Answer

While it is not necessarily easy to make a profit in the commodities market, it is important for investors to be mentally prepared for potential losses. Additionally, investors must be financially able to meet margin calls, but it is not recommended to spend all available cash on margin deposits as this can increase risk and leave investors with insufficient funds for other investments or expenses. Therefore, II and III are the only necessary considerations for investors participating in the commodities market.

If an Investor Is Going to Participate in the Commodities