22
QuizMultiple Choice

Investing

Question 22 • Personal Finance - EL3403

Why is it risky to invest in a commodity?

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

Explanation

Commodity prices can change sharply in response to factors such as supply, demand, or world events. If the price drops quickly after you invest, you could lose a substantial amount of money, so the best answer is that the commodity’s price might drop significantly very quickly.

AI-written and checked against the verified answer.

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