If Jorge takes Felicia’s advice, what is the most important informatio

QUESTION

If Jorge takes Felicia’s advice, what is the most important information to learn before he places an order?

A) What is the difference between a futures contract and a commodity exchange?
B) Can commodities be traded as part of an exchange-traded fund?
C) What market factors might make a given commodity rise in price in the future?
D) Which security exchange handles futures contracts in commodities?
E) What are precious metals trading for at the present moment?

ANSWER

Answer: C
Explanation: C) To have a reasonable chance of investing prudently in the commodities market, one needs a thorough knowledge of the market environment that governs the price of a given type of goods. So Choice C is correct: Jorge needs to master the factors that determine the market value of the product that he plans to invest in. Choice E: If Jorge were determined to invest only in precious metals, he might want to know the current prices of gold, silver, etc., but it would still be necessary to learn what makes such goods appreciate in value. The other choices concern general facts that do not affect his success in commodities investments.