21
QuizMultiple Choice

Financial Literacy — Test

Question 21 • Economics

Why is it risky to invest in a commodity?

Answer
A
Commodity stocks cannot be traded after you purchase them.
B
A commodity has little or no value as a long-term investment.
C
The investment will tie up your money for more than one year.
D
The commodity's price might drop significantly very quickly.

Explanation

Commodity prices can change sharply because they are affected by factors such as supply, demand, and weather. If the price falls significantly soon after you invest, your investment may lose value quickly. That makes a commodity risky; it does not mean it cannot be traded or must be held for more than a year.

AI-written and checked against the verified answer.

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