Alternative Finance - Test - Version A

What is a commodity?

• A finished product used in commerce
• A raw material used to manufacture goods
• A type of currency used in trading
• A type of investment

What is the purpose of buying futures contracts for farmers and manufacturers?

• To protect against price fluctuations
• To increase profits
• To control the commodity market
• To secure government subsidies

What do financial traders aim to profit off in commodity markets?

• Price fluctuations
• Government regulations
• Consumer demand
• Market stability

What natural factors can impact commodity markets?

• Weather conditions
• Government regulations
• Consumer preferences
• All of the above

Which of the following is not an energy commodity?

• Crude oil
• Natural gas
• Gold
• Brent crude

What is a futures contract in commodity trading?

• An agreement to sell a commodity at current market prices.
• A contract to buy or sell a commodity at a future price.
• A plan to buy commodities only in the future.
• A deal to trade only in soft commodities like wheat and soybeans.

Why is the spot price of a commodity important?

• It tells how much the commodity costs right now.
• It shows the price of the commodity last year.
• It is the price used for trading only gold and silver.
• It predicts the future price of the commodity.

What factor can drive the price of oil?

• Global demand
• Political instability
• OPEC decisions
• All of the above

What can affect the price of coffee?

• Weather conditions
• Political changes
• Market speculation
• All of the above

What organization controls a significant portion of the world's oil exports?

• OPEC
• UNESCO
• IMF
• World Bank